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Page 1: The Cost of Conflict for Children Report - Online Version

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THE COST OFCONFLICT FORCHILDRENFIVE YEARS OF THE SYRIA CRISISMarch 2016

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Front cover photo: Syrianchildren, Abd Al Kader (4)and Mona (2), stand outsidetheir tent in Lebanon’sBekaa Valley after the firstsnowfall of the season.

The Cost of Conict for Children |  Ma rch 2016 i

Black barrel bombs, black bodies, ablack helicopter gunship. When six-year-old Heba draws, the only coloursshe uses are black and red. Ibrahim tellsme, as he draws, ‘When I think of Syria,I only see black.’

As the conict in Syria enters its sixth

year, I – like everyone confronting thepersistent horror of this conict –

strive to nd a new way to cut through

 the complacency that keeps us from

delivering the only solution that matters to children: peace.

Sometimes, I tell the stories of individualchildren, like Heba and Ibrahim –surviving, but scarred – to bring home

 the stories of thousands more just like them. Sometimes I tell the story ofAylan, whose limp body on a Turkishbeach jolted us into action around the

 thousands of Syrian children risking theirlives to ee ve years of war.

Other times I share the horrifyingnumbers. At least 8.2 million childrenare now affected by conict across the

region. Between 11,000 and 19,000children have been killed, mostly byexplosive weapons. In the rst half of

2015, over 650 grave violations againstchildren were documented, nearly

 three-qua rters of wh ich were killi ngand maiming. An estimated 86,000children aged 6 months to 59 monthsare acutely malnourished.

And still other times I struggle to bring the numbers and the stories together –knowing that each child being countedhas a unique story of what the conict

has cost. Lost fathers, mothers, brothers,sisters, friends. Lost homes, toys, dreams.Lost education. There is no meaningfulway to measure these losses.

But we can measure the economic losses,

a measure that gives us some insight into

what life might have looked like for these

children if there had been no war. This

report – a collaboration between Frontier

Economics and World Vision – shows

 that the conict has cost Syria alone an

estimated US$275 billion. Even if we

achieved peace tomorrow, it would cost

Syria nearly half a trillion dollars more. If it

 takes another ve years to achieve peace,

nearly three times that amount will have

been lost. We can’t afford this. Syria can’t

afford this. Syria’s children can’t afford this.

This is lost money. It will never berecovered, never be spent to provideeducation, health care, safe environments,

livelihoods or a future for children. Everyday the conict continues, it deepens the

deprivation of Syria’s children today andinto the future. And yet, while we and

 they can’t afford not to have peace, sadly,we still seem to be able to afford war.

Five years on, appeals for humanitarianaid remain chronically and substantiallyunderfunded, despite the pledgesand the seemingly limitless budgetsavailable to fund and fuel the conict.

 While military funding appears to ow

seamlessly in response to operationalneed, humanitarian funding struggles tokeep up with humanitarian need. Notonly is this contradiction appalling, but itis short-sighted and, our report shows,illogical. Investing in conict and failing to

invest adequately in peace has come at acost that will deepen the economic abyss

 that Syria will have to climb out of whenpeace nally comes.

But worst of all, it comes at the costof more Syrian children dead, hurt and

suffering in Syria and beyond.

This new research by World Vision andFrontier Economics gives us one morereason and one more way to count thecost of the conict for children in Syria.

My prayer is that it will be the last.

Conny LennebergRegional Leader, Middle East and EasternEurope – World Vision International

FOREWORD

© World Vision International 2016

This report was co-written by Frontier Economics and World Vision International.Frontier Economics undertook the original economic research for and within thisreport. World Vision International engaged Frontier Economics as experts ineconomic analysis to assess the cost of the Syria conflict on Syria and its neighbours.

 World Vision International worked with Frontier Economics to develop the

economic analysis into a broader narrative.

 World Vision International is a Christian relief, development and advocacyorganisation dedicated to working with children, families and communitiesworldwide to reach their full potential by tackling the causes of poverty and injustice.

 World Vision International is dedicated to working with the world’s most vulnerablepeople. World Vision International serves all people regardless of religion, race,ethnicity or gender.

Frontier Economics is Europe’s largest independent economic consultancy, withover 120 economists based in Germany, Belgium, Ireland, Spain, France, Austria,Switzerland and the UK. Frontier Economics specialises in the application ofeconomics to help clients resolve complex policy and strategic challenges.

Frontier Economics Limited in Europe is a member of the Frontier Economicsnetwork, which consists of separate companies based in Europe (Brussels, Cologne,London and Madrid) and Australia (Melbourne and Sydney). The companies areindependently owned, and legal commitments entered into by any one company donot impose any obligations on other companies in the network.

Lead authors: Frontier Economics, Frances Charles, Nina Nepesova, Isis Sunwoo,Emma Wanchap.

The authors would like to acknowledge the valuable contributions to the reportof: Maria Derks-Normadin, Chris Derksen-Hiebert, Lauren Fisher, Laura Gemmell,

Majella Hurney, Brian Jonson, Sharon Marshall, Suzy Sainovski and members of the World Vision Syria Response and Advocacy Response Group.

All rights reserved. No portion of this publication may be reproduced in any form,except for brief excerpts in reviews, without prior permission of the publisher.

Published by the Syria Response team on behalf of World Vision International.

Photo credits: Ralph Baydoun – front cover, Mona Daoud – pg 3, Goran Stupar – pg 8,Christopher Lee – pg 37, 39, Jon Warren – pg 8, 31, 32, Kinan Diab – pg 40

Managed on behalf of the Syria Response by: Frances Charles. Editor in Chief: EdnaValdez. Production Editor: Katie Fike. Copyediting: Joan Laflamme. Proofreading:Audrey Dorsch. Design Coordination: Suzy Sainovski. Design: Justin Dymott.

This is lostmoney. It will neverbe recovered, neverbe spent to provideeducation, healthcare, safeenvironments,

livelihoods or a futurefor children.”

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The Cost of Conict for Children |  Ma rch 2016 3The Cost of Conict for Children |  Ma rch 2016 2

1 On 4 February 2016, the UK, Germany, Kuwait, Norway and the United Nations co-hosted a conferenceon the Syria crisis in London to raise signicant new funding to meet the immediate and longer-termneeds of those affected. The Supporting Syria and the Region conference brought together worldleaders from around the globe and raised over US$11 billion in pledges – US$5.8 billion for 2016 and afurther US$5.4 billion for 2017–20 to enable partners to plan ahead.

• Turkey has fared comparatively better

 than its neighbours. Estimated effectsof the conict on GDP per capita

range from slight to moderatelypositive. This result reects a number

of factors, notably, the size of theTurkish economy, its strong integrationwith the European Union and somepositive effects of the conict, including

more labour and capital arriving inTurkey. Turkey has spent over 7 billionEuro (around US$7.8 billion) of itsown money on supporting the Syrianrefugee community since the start of

 the conict.

• For Lebanon and Jordan, loss of

overall GDP has been more modestcompared to the per capita losses. Thishighlights the effect of the inux of

refugees on living standards. Pressureon basic services such as public schoolsand hospitals has reduced the overallquality of care for all vulnerable groups,including host communities. Limitedsupport to meet health care needsin particular has resulted in increasedmorbidity and mortality, especiallyamong children under 5. This could be

managed by providing refugees withmeans to engage in productive activitiesin host countries.

• Families are under acute nancial

pressure, with 90 per cent of refugeesin Lebanon and Jordan consideredpoor. Previously barred from formalemployment, parents are sending

 their children to wor k or entering them into marri age at a young age just to help the fami ly survi ve, makingchildren less likely to return toschool. Only 48 per cent of refugeechildren from Syria are able to access

education opportunities.

• At least 8.2 million children inside

Syria and across the region are nowexperiencing displacement, interruptedschooling, broken health systems, foodinsecurity and limited protection fromserious harm and abuse. Without themeans for these children to receivesupport, rebuild their lives and gainessential skills, conditions are beingcreated that will transmit povertyacross generations, fuel social instabilityand undermine prospects for recovery.

 

Donor governments must:

• Swiftly and fully translate pledges

made at the 2016 London

Conference1 to committed fundingfor the 2016 Syria HumanitarianResponse Plan and the 2016–17Regional Refugee and ResiliencePlan. In order to ensure full

 transparency, accountability andimplementation, donors shoulddemonstrate that the historicpledges of nearlyUS$11 billion made at the 2016London Conference constitute newcontributions, not contributionspreviously made or promised.

• Fully fund education plans developed

by host countries and agencies

responding to the crisis in Syria,

aiming to have all Syrian children in

school and with access to quality

education by the 2016–17 school year.

The minimum funding requirement

from donors is US$1.4 billion per

year – or the equivalent of US$1 per

child per day – covering 3.8 million

children, including all out-of-school

Syrian refugee children, vulnerablechildren in host communities and

children still inside Syria.

• Ensure that commitments to invest in

 the resilience of affected communities

are further detailed, and a strategy and

 timeline developed for reconstruction

in line with the ongoing peace process

 to start as quickly as possible once

a political settlement has been

achieved. Development grants must

be prioritised over loans, with capacity

building for local Syrian civil society

and implementing agencies prioritised

within donor plans. Reconstruction

and development efforts are central

 to ensuring Syria’s ability to sustain

economic growth and corresponding

living standards.

The governments of Lebanon, Jordan

and Turkey must:

• Allow those eeing the conict in

Syria to seek safety and protectionby keeping their borders open,respecting the right to freedom ofmovement, adhere to the principleof non-refoulement, and ensure

 that those displaced people seekingprotection are able to accessregistration and legally stay.

• Implement commitments to

removing barriers to livelihoodopportunities detailed in compactsproduced during the 2016 LondonConference and make theseopportunities available to all eligible

parties in each country, with the full nancial supp ort of the

international community.

The international community must:

• Fully support Lebanon, Jordan

and Turkey compacts and expandstock of capital through investment,including in infrastructure, toenhance the skills of local workersand to strengthen the ability ofrefugees to access the formaleconomy, recognising these plansas a landmark in supporting thecurrent and future economicviability of affected communities.

2. RECOMMENDATIONS

2.1 INVEST IN THE FUTURE OF CHILDRENIN SYRIA AND THE REGION

Eight-year-old Ibrahim workslong hours on agricultural landin Lebanon’s Bekaa Valley tohelp support his family.

It is already clear that immediate

improvements must be made

 to protect all civilians in Syria,

especially children, by ending

violations of international human

rights and humanitarian law,

including killing, maiming, and

making attacks against schools

or hospitals. It is also clear

 that refugees urgently need

improved access to income

opportunities to prevent sliding

further into poverty. But these

immediate measures are not

enough. Nor is simply the

cessation of the conict.

To reverse the economic cost of

conict on Syria and the region,

a large-scale reconstruction

and long-term investment plan

is required. In the short term,

refugee host countries must full

recent commitments to enable

local workers and refugees to

access better opportunities in

 the formal economy and labour

markets. In the long term, the

social and physical infrastructure

of Syria and of the region must

be restored in order to lay a

foundation upon which thefuture generation can rebuild.

The international community

must act now to end the conict

and plan for recovery to remove

 the long shadow already cast

over the lives of Syrian children.

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The Cost of Conict for Children |  Ma rch 2016 5The Cost of Conict for Children |  Ma rch 2016 4

2.2 PROTECT CHILDREN AND FAMILIES CAUGHT INTHE CONFLICT

Parties to the confict must:

• Abide by international human rights

law and international humanitarian law.

• Immediately end grave abuses of

children’s rights, including ending thekilling and maiming of children andattacks against schools or hospitals.

• End all diversion of aid and attacks on aid

workers and humanitarian convoys, and

investigate and take appropriate action

where these attacks have taken place.

• Facilitate the safe, unfettered and

effective access of impartial aidagencies to all parts of Syria, in order

 to respond to the humanitarian needsof all civilians affected by the conict.

The UN Security Council and the

international community must:

• Ensure that the provision of life-saving

humanitarian assistance inside Syria and

in those countries hosting refugees is

provided based on need and without bias.

• Take immediate steps to hold

accountable those responsible forbreaches of international human rightslaw and international humanitarianlaw, in particular where these concernchildren or the safety and security ofhumanitarian aid workers.

• Fund and continue to encourage UN

agencies and NGOs to signicantly scale

up protection activities inside Syria.

2.3 PROTECT CHILDREN AND FAMILIES FLEEINGTHE CONFLICT

The UN Security Council and host

 governments in Europe must:

• Work with humanitarian actors,

including UN agencies, civil societyand national governments to put inplace a protection mechanism acrossmigration routes to and throughEurope for unaccompanied children

 to ensure their protection fromexploitation and abuse.

Governments hosting displaced people must:

• Signicantly scale up resettlement and

alternative humanitarian admissionsprogrammes or other options in order

 to protect all who ee conic t and, in

particular, to accommodate childrenand their families. Wealthy countriesmust move swiftly to allow morerefugees better access to protectionoutside the region in 2016.

2.4 MAKE ALL EFFORTS TO BRING A SWIFTRESOLUTION TO THE CONFLICT

Parties to the confict must:

• Immediately put an end to the ghtingand enter into meaningful, inclusivepeace talks, without preconditions,

 that respect the rights and aspirationsof the Syrian people, in line with the2012 Geneva Communiqué and theVienna Statements.

The UN Security Council and the

International Syria Support Group must:

• Immediately facilitate the fullimplementation of UN Security CouncilResolution 2254 and ensure politicalsupport for the efforts of Staffan deMistura, UN Special Envoy for Syria,

 to convene formal negotiations on a

political transition process as well as take immediate steps to secure the fullsupport of all parties to the conflict

 to reach a long-lasting nationwideceasefire of hostilities in Syria.

Special Envoy de Mistura must:

• Ensure inclusion of civil society, in

particular women, children, youth and

faith leaders, in the peace process and

in the attempts to reach a long-lasting

nationwide ceasefire of hostilities, in

order to ensure just, sustainable and

inclusive outcomes.

This viciouscycle of death anddestruction risksbeing seen as the newnormal in Syria. Butdeath, suffering,wanton destructionand disregard for thelaw should never beseen as normal. Wecall on all influentialgovernments… to domore to persuadewarring parties tofulfil their basic legalobligations.”

 – Stephen O’Brien,UN Under Secretary

General and EmergencyRelief Coordinator

3.1 CRISIS CONTEXT

Since it erupted in March 2011, the conict

in Syria has had a devastating effect on

Syria’s population. The conict has resulted

in at least 250,000 deaths, with some

independent Syrian organisations citing

upwards of 450,000 at the start of 20162 –

between 11,000 and 19,000 were children3/4.

A conict marked by a total disregard for

international humanitarian law by all parties

 to the conict, incidents of unlawful killing,

 torture, targeting of civilian areas such as

schools and hospitals, restriction of aid and

access have increasingly become the norm

during the ve-year span of the crisis.

The conict has left an es timated

13.5 million people, including over 6 million

children, in need of humanitarian assistance

and protection inside Syria alone.5 Inside

Syria, all grave violations against children

are being committed, with the main cause

of death being explosive weapons.6 In the

rst half of 2015, over 650 grave violations

against children were documented, with

killing and maiming representing over

72 per cent of the documented cases.7 

For those who have managed to flee,

 the official number of refugees seeking

protection in neighbouring countries as of

February 2016 was over 4.7 million peopleaccording to UNHCR sources: over

2.6 million registered in Turkey, over 1

million in Lebanon and approximately

0.6 million in Jordan.8 Half of the refugee

population comprises children, meaning

 that over 2 million Syrian children are

growing up as refugees. In total at least 8.2

million children inside Syria and across the

region are now experiencing displacement,

interrupted schooling, broken health

systems, food insecurity and limited

protection from serious harm and abuse.9

The increased strain on services in theregion of hosting this number of refugeeshas led to worsening living conditions forSyrian refugees and hosting communitiesalike. While the direct and immediateeffects of the conict on the Syrian

population are profound, the conict

has had an equally severe and potentiallylong-term impact on economic activityinside and for neighbouring countries.

This deterioration of conditions inside Syria

and in neighbouring countries resulted

in 2015 seeing the highest numbers of

Syrian refugees undertaking risky journeys

 towards Europe.10 Just over 10 per cent

of those who have ed the conict since

its beginning have sought safety in Europe,

with 813,599 asylum applications madebetween April 2011 and April 2015.11

3. INTRODUCTION

2 Syrian Centre for Policy Research, Confronting Fragmentation  (2016), 62, http://scpr-syria.org/publications/policyreports/confronting-fragmentation/.

3 Oxford Research Group, Stolen Futures: The Hidden Toll of Child Casualties in Syria  (2013), 1, http://www.oxfordresearchgroup.org.uk/sites/default/les/Stolen%20Futures.pdf.

4 Syrian Network for Human Rights, Children of Syria… The Drowned Hope (November 2015), 1.5 UN OCHA, 2016 Humanitarian Needs Overview: Syrian Arab Republic (October 2015), 4, http://reliefweb.int/ sites/

reliefweb.int/les/resources/2016_hno_syrian_arab_republic.pdf.6 Oxford Research Group, Stolen Futures.7 UN OCHA,  2016 Humanitarian Needs Overview: Syrian Arab Republic  (October 2015), 7.8 UNHCR, Syria Regional Refugee Response  (January 2015), http://data.unhcr.org/syrianrefugees/regional.php.9 UNHCR, Syria Regional Refugee Response.10 Joint Agency Brieng Paper,Right to a Future: Empowering Refugees from Syria and Host Governments to Face a Long-

Term Crisis (November 2015), 2,11 UNHCR, ‘Europe: Syrian Asylum Applications’,  Syria Regional Refugee Response   (January 2015), http://data.unhcr

.org/syrianrefugees/asylum.php.

Children are affected byarmed conict in many

different ways. In order

 to advance the goalof protecting childrenduring armed conict

and ending the impunityof perpetrators, theUnited Nations SecurityCouncil identied six

categories of violations – the so-call ed six graveviolations:

• killing and maiming

of children

• recruitment or use of

children as soldiers

• sexual violence

against children

• attacks against schools

or hospitals

• denial of humanitarian

access for children

• abduction of children.

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I sell tissuesevery day. My father issick, he can’t work. Iused to play and go toschool back in Syria.Help us get out ofhere so that we cango someplace wherewe can learn.”

 – Ali, aged 13,

(pictured above)Bekaa Valley, Lebanon.

The Cost of Conict for Children |  Ma rch 2016 7The Cost of Conict for Children |  Ma rch 2016 6

3.2 REPORT PURPOSE

The purpose of this report is to providean estimate of the economic and socialcosts of the conict on Syria and,

via its spillover effects, on Lebanon, Jordan and Turkey. This report beginsby providing an estimate of the cost of

 the conict from it s beginning to Januar y

2016. It then provides estimates on thefuture effects of the cost of conict.

The dire economic effects of the conflict,even if it stops tomorrow, will continuewell beyond the implementation ofa peaceful resolution. This is because

 the cost of conict will continue toaccumulate for as long as actual levelsof GDP remain below what they wouldhave been in the absence of conict.

Investment is the key to stemming thecontinuation of the costs associatedwith the conict once there is a peaceful

resolution. Theories of economic growthand of growth in post-conict scenarios

predict that once conict has ceased, an

economy should recover to close thegap that has developed due to conict.

However, both the extent and speed ofrecovery in post-conict Syria will depend

on a suitable enabling environmentfor the resumption of growth-inducingactivities, notably investment.

This report presents both the presentcosts of the conict and their impact on

future growth prospects:12

• Foregone economic growth as aresult of the conict: In each yearof the conict growth is likely to be

lower than if conict were absent.

This occurs through a combination ofeffects, notably the destruction of theproductive capacity of economies, the

12 This report was co-writ ten by Frontier Economics and World Vision. Frontier Economics undertook the originaleconomic research for and within this report. World Vision International engaged Frontier Economics as expertsin economic analysis to assess the cost of the Syria conict on Syria and its neighbours. World Vision Internationalworked with Frontier Economics to develop the economic analysis into a broader narrative.

13 See Paul Collier, ‘On the Economic Conse quences of Civil War’, Oxford Economic Papers 51 (1999): 168–83.

Ali, aged 13, is missing out on school.He sells tissues on the street inLebanon to help support his family.

disruption of investment plans and thediversion of resources from productiveactivities to non-productive activities.13 Foregone growth in economicoutput represents lost developmentopportunities. It has real consequencesfor children, given the relationshipbetween poverty, in its variousdimensions, and economic growth.

• The direct nancial costs of

conict: These include outlays onmilitary and security, humanitarianassistance and public servicesexpansion to accommodate refugees;

 these outlays increa se signicant lyduring conict.

• The indirect costs of conict:

Conict-related public spending is

likely to divert government resourcesaway from long-term investmentin areas of crucial social impactsuch as education, health care andinfrastructure. This diversion has aneffect on the present and future well-being of society, particularly on themost vulnerable. Crucially, it reduces

 the long-term development potential

of a country, given the importanceof these sectors as determinants offuture growth and the well-being ofchildren as the future work force.

• Wider economic and socialcosts, in particular in health andeducation: The conict has a direct

effect on the health and educationalattainment of the Syrian people,especially children. It also has anindirect effect on neighbouringcountries as the ow of refugees

puts additional stress on their healthand education services. This kind

of deterioration of human capital islikely to inict long-term damage on

productivity inside Syria as well as the wider region, further limiting thepotential for future economic growth.

This World Vision mobilehealth clinic in northern Syriamoves door-to-door to reachfamilies who are unable toaccess health care servicesdiminished by conict.

The partiesto the conflict have sofar, over and overagain, eluded theirresponsibility to stopthe war... Whileefforts to bring peacehopefully continue, wemust not fail in ourresponsibility to helpand protect. This is aglobal responsibilityand today we havethat opportunity.”

 – Filippo Grandi,UN Refugee AgencyHigh Commissioner

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4. ESTIMATING GROWTH

IMPACTS OF THE CONFLICT

14 Elena Ianchovic hina and Maros Ivanic, ‘Economic Effec ts of the Syrian War and the Spread of the Islamic Stateon the Levant’, World Bank Policy Research Working Paper, no. 7135 (2014), http://documents.worldbank.org/curated/en/2004/12/22316371/economic-effects-syrian-war-spread-islamic-state-levant. The study uses a versionof the Global Trade Analysis Project general equilibrium model specically congured for the purpose. The modelsimulates a counterfactual scenario in which the region engages in deep trade liberalisation and then simulates aconict scenario in which this liberalisation is reversed and in which various model variables are changed in order

 to represent the conic t effects.15 Collier, ‘On the Economic Con sequences of Civil War’, 168–83; P. Collier and A. Hoefer, ‘Conic t’, in Global

Crises, Global Solutions, ed. B. Lomborg (Cambridge: Cambridge University Press, 2004); A. Abadie and J.Gardeazabal, ‘The Economic Costs of Conict: A Case Study of the Basque Country’, American Economic Review  93/1 (2003): 113–32; A. Abadie, A. Diamond and J. Hainmueller. ‘Comparative Politics and the Synt hetic ControlMethod’, American Jour nal of Political Science  59/2 (2015): 495–510.

The Cost of Conict for Children |  Ma rch 2016 9The Cost of Conict for Children |  Ma rch 2016 8

4.1 METHODOLOGY

This report discusses the impact of theSyria conict on the following countries:

Syria, Turkey, Lebanon and Jordan. Asalready observed, measuring the cost of

conict requires comparing economicperformance under conict with a

counterfactual scenario in which conict

is absent. The counterfactual scenario(economic performance in a conict-free

situation) is, of necessity, not directlyobservable and needs to be inferred.

A variety of methodologies canbe employed to undertake thecounterfactual analysis. Recent researchby the World Bank uses a computablegeneral equilibrium model to measure

 the growth effects of the conict.14 For this report, econometric techniques areused to calculate a benchmark rate ofgrowth in real per capita GDP for thecountries concerned that representsconict-free economic performance. The

calculated benchmark is then compared to actual economic performance. The useof econometric techniques is consistentwith a signicant body of research into

 the impacts of conict.15 

The counterfactual benchmark growth

rate is derived using cross-countryregression analysis. A panel of over120 countries is used to estimate therelationship between rates of

growth and specic characteristics

(GDP, sector mix, savings rate, literacyrate and unemployment rate) andcommon shocks (such as the effects

of the global nancial crisis) over time.This estimating is guided by the largebody of research on the drivers ofeconomic growth, taking into account

 the idiosyncratic nature of countriesin their growth patterns and the manyreasons a country may overperform orunderperform. In addition to conict,

countries may underperform due tosector-specic shocks, for example, the

Eurozone crisis or previous growth thatis not sustainable.

The rates of growth for the countriesof interest for the period since thestart of the conict are based on

 these estimates obtained for the pre-conict period. This projection provides

 the benchmark ‘conic t-free’ rate of

growth. The difference between actualand benchmark growth rates givesan indication of a country’s relativeperformance during the conict period.

The technical annex to this reportprovides a detailed description of the

econometric methodology used, aswell as testing for the robustness of theresults by using alternative functionalspecications of our growth equations.

‘People look at you as a second-class citizen because

you are a refugee’

 Jara, a 23-year- old Syrian refugee, fled with her family to Lebanon from Syria almost three years ago.Her husband travelled from Lebanon to the Netherlands and later to Germany in November 2015. Jara’shusband left in search of a better life for the family. In Lebanon they had no decent living conditions or legalaccess to employment and health care.

Many Syrian refugees work in Lebanon in diff icult conditions for up to 12 to 13 hours a day, earning as little asUS$10. Jara and her husband felt they were being taken advantage of. ‘Syrians, like all other people, have towork in order to provide for the family, but a lot of us do not have a choice but to accept the bad conditions.’

 With no money to pay for services, and unable to follow the procedures required for Syrian refugees toaccess health care, Jara became desperate when her eldest son, Hamza, 30 months of age, developedsevere diarrhoea. After being refused treatment in the hospital because she could not produce the correctdocuments or payment, Jara carried her son into the examination room and told the doctor that she wasnot leaving until he was treated.

 Jara and her two sons, Hamza and Ibrahim, 10 months of age, took an arduous, 10-day journey by land andsea from Lebanon to Turkey and then to Europe. ‘The hardest part was crossing the sea. All the passengerswere wet and cold. Children were scared, shivering and crying in the boat, which carried many more people

 than it should,’ says Jara.

‘People look at you as a second-class citizen because you are a refugee,’ says Jara. While travelling with herchildren from Lebanon to Germany to reunite with her husband, Jara met World Vision staff in a child-friendly space, offering basic services, including food and hygiene supplies, to refugees.

Ibrahim, 10 months(left) and Hamza, 2 -and - a - half, sit by theheater in a World Visionchild friendly space nearthe Croatian border.

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The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201610 11

Focus is on GDP per head of population,

inclusive of net refugee numbers. These

population numbers are derived by

combining World Bank population

estimates with UNHCR data on refugee

numbers by origin and host country.16 The

modelling, therefore, takes into account the

considerable movement of refugees from

Syria into Lebanon, Jordan and Turkey.

The movement of population, whichis a direct result of conict, has a key

inuence on per capita GDP impacts in

 the countries of interest, notably Syria, Jordan and Lebanon. It also gives rise to

various policy issues that are discussed insections 2, 5 and 6 of this report.

4.2 OVERVIEW OF RESULTS FOR THE FOUR COUNTRIES

The cost of conict is measured by

rst deriving actual and benchmark

growth rates and then applying them to2010 GDP gures (the year before the

conict began). Each year that growth

is less than the benchmark rate, thelevel of GDP per capita will fall awayfrom expected levels. And the longer

 that GDP per capita is below expectedlevels, the greater the cumulative impactover time in terms of absolute GDPnumbers. Differences in per capita GDPcan be taken to represent the shortfallin living standards experienced bycommunities, children and their familiesin the economies in question. Theabsolute GDP gures can be interpreted

as the cumulative cost of the conict.17

Table 1 presents the estimated

differences in economic performance as aresult of the conict. The effects for Syria

are particularly large: GDP per capitais estimated to be around half of whatit would have been in the absence ofconict. The decline in GDP in absolute

 terms is partly offset by shrinkage inSyria’s population, which moderates theimpact as measured by changes in GDPper capita, though the shrinkage in thelatter is nevertheless striking.

In the case of Lebanon, total GDPgrowth is lower than expected. While

 the effects on GDP in absolute termsare relatively limited, the combination ofshortfalls in growth rate and the largenumber of refugees create a signicant

effect on GDP per capita.

Smaller impacts are observed in Jordan.Growth in real GDP has been slightlylower on average, and while GDPper capita has fallen as a result of thenumbers of Syrian refugees, their impacthas been moderated by the departureof a number of Iraqi refugees.

The economic impact for Turkey over the conic t peri od is, on bal ance,

positive (however, note the furtherdiscussion in section 4.3 below). Theresult for Turkey reects a number of

factors, notably, the size of the Turkisheconomy and its closer integration with

 the European Union , and the fact tha tspillover effects from Syria have hada number of positive impacts. Theseinclude the investment of Syrian capitalin Turkey and the fact that refugeeshave stimulated an expansion of higher-skilled jobs.18

Figures from ofcial sources have

been used wherever possible,largely from the World Bankor UN agencies as appropriate.These agencies have been theconsistent gatherers of datarelevant to this report for theduration of the conict. Given

 that collecti on of data duri ng this crisis, pa rticul arly insid eSyria, is extremely challenging,

 this repor t has used the bestpossible, consistent and available

data in its analysis.

*Turkey’s impacts are calculated from 201219 

A discussion of various aspects of the economic performance of thesecountries can be found in section 4.3.The discussion is useful in highlightinghow the impacts of the conict are

distributed within each of the countriesconcerned. Even within the countries

 that experience only moderatelynegative, or even positive results,segments of the population (notablylower-skilled workers and ruralcommunities) have faced signicant

adverse impacts.20

16 Data sources are described in detail in the technical annex.17 The GDP gures do not capture informal economi c activity, which in Syr ia, Lebanon and Jordan is likely to have

increased in signicance over the course of the conict. A case may therefore be made to the effect that changesin GDP gures do not fully represent changes in social well-being. However, it is important to bear in mind that theincreasing informalisation of activity in these countries is a reection of the undoing or fragilisation of institutionsand hence linked to a reversal of progress achieved by these countries in the last decade or more. Consideredfrom that perspective, it appears appropriate to treat changes in GDP gures as a suitable representation ofchanges in living standards.

18 World Bank, The Impact of Syrians Refugees on the Turkish Labour Market (2015), 13, http://documents.worldbank.org/curated/en/2015/08/24946337/impact-syrians-refugees-turkish-labor-market.

19 The effec ts are measured from 2012 because a number of country-specic fac tors led Turkey to have a much-higher- than-usual rate of growth in 2011. It is unlikely that this spike in growth is attributable to the conict. Nor is it likely that this one of spike in the growth rate is reective of longer-term growth prospects for the Turkish economy.

20 Note that the World Bank GDP data for Syria extends only to 2007, after which growt h rates are taken from theTotal Economy Database.

Table 1. Summary of estimated impacts of the conict at end of 2015

Average differencein per capita growthrate since 2011

Change in real GDPper capita (USdollars)

Change in absoluteGDP (billions of USdollars)

Syria -11.6 per cent -3,028 (-45.1 per cent)

-275

 Jordan -2.6 per cent -1,468 (-12.1 per cent)

-7

Lebanon -4.9 per cent -3,972(-22.7 per cent)

-8

Turkey* -0.3 per cent + 762(4.2 per cent)

+54

As we enterthe sixth year of theSyrian crisis, allinternational dataconcur that Lebanonis bearing adisproportionatelyhigh burden as aresult of this conflictand is facing ahumanitarian tragedy,especially in terms ofrefugees per capita

 – the highest rate in

the world.” – Lebanon Statementof Intent, SupportingSyria and the Region

Conference 2016

 Jordan has assumed a heavy burden due toits hosting of refugees and is carrying out a globalpublic good on behalf of the international community.The latest refugee influx due to the war in Syria hasstretched already limited resources and imposedsevere stress on Jordan’s economy, hostcommunities, fiscal position and public serv ices.”

 – The Jordan Compact, Supporting Syri aand the Region Conf erence 2016

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The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201612 13

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

2011

GDP per capita growth

2012 2013 2014

Actual Benchmark Difference

2015

Figure 1. Syria: Comparison of actual and benchmark growth rates during conict period

Figure 2 shows the equivalent results

for Lebanon. A country with the same

characteristics would have expected GDP

per capita growth between 1.2 per cent

and 1.8 per cent in the conict period.

From 2012 to 2014, actual GDP growth

per capita was well below this, driven

by large increases in population. The

difference between actual and benchmark

growth is -4.9 per cent on average across

 these ve years.

The ‘v-shaped’ appearance of the linedepicting actual per capita growth ratesillustrates the pronounced impact of thelarge numbers of Syrian refugees. Once

 that initial impact is absorbed, per capitagrowth rates recover as longer-termdeterminants of growth kick in.

Source: Frontier Economics analysis of World Bank, UNHCR and Total Economy Database dataSource: Frontier Economics analysis of World Bank, UNHCR and Total Economy Database data

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

2011

GDP per capita growth

2012 2013 2014

Actual Benchmark Difference

2015

Figure 2. Lebanon: Comparison of actual and benchmark growth rates during conict period

Detailed description of cost of conflict to date

Impact on growth rate

Figure 1 compares actual and benchmark

growth rates for Syria. The cross-country

regression analysis suggests that a country

with Syria’s characteristics would have

been expected in the period 2011–15 to

have a per capita growth rate between

3.4 per cent and 4.1 per cent. But actual

growth per capita has contracted during

 that period by between 2.2 per cent and

17 per cent. The difference between these

 two lines shows the estimated impact of

conict, causing growth to be lower than

expected by between 5.8 per cent and

20.5 per cent.

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The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201614 15

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

2011

GDP per capita growth

2012 2013 2014

Actual Benchmark Difference

2015

Figure 3 shows the results for Jordan.Actual growth in GDP per capita is less

 than the benchmark rate. The differenceranges from +1 per cent to - 4 percent and is -1.6 per cent on avera ge.

For the same reasons as Lebanon, thegraph depicting per capita growth ratesexhibits a V-shaped structure.21

In the case of Turkey (Figure 4 below), the actual growth exceeds thebenchmark by 0.9 per cent per year onaverage. As explained in the technicalannex, the result for Turkey is sensitive

 to whether the spike in 2011 growthis assumed to be reective of longer-

 term trends. The more we allow for thepossibility that some of this increasedgrowth would have persisted in yearsafter 2011, were it not for the conict,

 the more negative the estimated impactof the conict.

On balance, it seems plausible that the

spike in growt h in 2011 represented

factors that were not sustainable. At the time the International MonetaryFund attributed the spike to a surge indomestic demand fuelled by historicallylow interest rate and a surge of short-

 term capit al ows, and it also caut ioned

about the risks these posed.22 Thespread of results described for Turkeyin the technical annex, under variousmodelling alternatives, suggests that themost plausible view is that the conict

has had a negligible or moderatelypositive impact on Turkey’s economy.

21 Note that these resul ts are sensitive to assumptions regardin g Iraqi refugees in Jordan. The UNHCR gures show450,000 in 2011, falling to 65,000 in 2012, but this is a data revision rather than a movement of that magnitude.These movements are not currently explicitly captured in the counterfactual. The higher-than-expected growthin GDP per capita for 2012 comes about because the population drops sharply as a result of Iraqi refugees leaving

 Jordan. These are partly re placed by Syrian refugees, although in 2012 there is a net reduction if the repor tedUNHCR yearly totals are to be taken at face value. See UNHCR gures for Iraq generally, http://data.unhcr.org/syrianrefugees/country.php?id=103.

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

2011

GDP per capita growth

2012 2013 2014

Actual Benchmark Difference

2015

Figure 3. Jordan: Comparison of actual and benchmark growth rates during conict period

Source: Frontier Economics analysis of World Bank, UNHCR and Total Economy Database data

Figure 4. Turkey: Comparison of actual and benchmark growth rates during conict period

Source: Frontier Economics analysis of World Bank, UNHCR and Total Economy Database data

22 International Monetary Fund, Turkey – Article IV Consultations, Preliminary Conclusions (2011), http://www.imf.org/external/np/ms/2011/091911a.htm.

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When families ee

conict, such as those

in Al-Haramein camp innorthern Syria, they leavetheir homes, schoolsand opportunities foremployment behind.

The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201616 17

2011

GDP per capita (US$, constant 2011)

2012 2013 2014

Lebanon - Actua l Jordan - Actual

2015

Syria - Actual

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Turkey - Actual

Benchmark Benchmark Benchmark  Benchmark 

Impact on GDP per capita

Projections over time of benchmarkGDP per capita are derived by applying

 the GDP growth rates to 2010 GDP percapita. This is shown in Figure 5, withdashed lines showing the benchmarkvalues and solid lines showing actuals.For each year that growth is less thanexpected, actual and benchmark GDPlevels will diverge further.

The benchmark lines are relativelysmooth, as there is little reason topredict any sharp movements from year

 to year. For Syria, there is a reasonablysteady decline in actuals over time.Both Lebanon and Jordan divergeconsiderably at 2013, when there werelarge increases in refugee populations in

 those countries.23 For Turkey, we beginat the year 2012, as the higher-than-expected growth in 2011 is unlikely tobe an impact of the conict (and Turkey

had been strongly outperforming itsbenchmark in the previous year). From

 this point there is little divergence.

The headline numbers for GDP percapita can mask signicant distributional

differences across segments ofpopulation. As documented in section4.3, low-wage low-skill workers inLebanon, Turkey and Jordan may havebeen affected by the large numbersof refugees because of labour-marketdisplacement effects. At the same time,higher-skilled workers are reported

 to have benett ed from the arriv als

because of increased demand for their services and because the jobsperformed by refugees and low-skilledworkers are complementary to higher-skilled jobs. While reliable data is scarce,it is expected that the cumulative effectwill be to widen income inequality.24

23 According to UNHCR data, in Jordan th e total persons of concern increased from about 117,000 in January 2013 to about 576,000 in December 2013, http://data.unhcr.org/syrianr efugees/country.ph p?id=107. In Lebanon thenumber of registered Syrian refugees in January 2013 was about 130,000 and by December 2013 about 802,000were registered, http://data.unhcr.org/syrianrefugees/country.php?id=122.

24 World Bank, Lebanon: Overview: Context   (September 2015), http://www.worldbank.org/en/country/lebanon/overview.

Figure 5. Comparison of actual and benchmark levels of GDP per capita during the conict period

Source: Frontier Economics analysis of World Bank, UNHCR and Total Economy Database data

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The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201618 19

Lebanon Jordan Turkey  Syria

-$3,028

-$3,972

-$974

-$218

-4500

-4000

-3500

-3000

-2500

-2000

-1500

-1000

-500

0

Absolute impact (US$) Relative impact %

Absolute impact Relative impact

-50%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

- 45.1%

- 22.7%

- 8.4%

- 1.2%

Figure 6 compares actual andbenchmark GDP per capita as of 2015,giving a sense of the overall absoluteand relative impacts. By 2015, GDP percapita in Syria was US$3,000 less than

 the benchmark level, a reduction ofsome 45 per cent. There has also been areduction of approximately 14 per centin the resident population. In absolute

 terms, the largest reduction in per capitaGDP is for Lebanon – nearly US$4,000,or 22.7 per cent. The impact for Jordan

is smaller – around US$1,000 per capitaper year, or 8.4 per cent less than 2015benchmark levels.

It is useful to note that these gures are

averages across the population only; some

communities or groups may be affected by

 this reduction more acutely than others.

Refugee populations, as well as already

low socioeconomic groups, are likely to

be particularly vulnerable to the reduction

and, in turn, so are their children.

Cumulative GDP impact over time

In Figure 7 the costs as cumulativeimpacts show how costs gradually accrueover time. For example, in 2012 thecumulative impact on Syria wasUS$48 billion (US$11 billion in 2011plus US$37 billion in 2012). By the endof 2015 the cumulative impact wasUS$275 billion.

To put that gure in context, the global

aid budget, as measured by net ofcial

development assistance delivered by allOECD economies, amounted toUS$135 billion in each of 2013 and2014.25 It is close to 150 times the Syrianhealth budget prior to conict.26 It isnearly one and a half times the budgetfor the UK’s National Health Servicefor 2015–16.27 It is approximately asmuch as France and Germany togetherinvested in public education.28 It isroughly the GDP of Portugal in 2014.29

Figure 6. Overall impacts on 2015 GDP per capita Figure 7. Cumulative impac ts from 2011

Source: Frontier Economics analysis of World Bank , UNHCR and Total Economy Database data Source: Frontier Economics analysis of World Bank , UNHCR and Total Economy Database data

-300

-250

-200

-150

-100

-50

0

50

100

2011

US$ billions (2011 constant)

2012 2013 2014 2015

Lebanon Jordan SyriaTurkey 

25 OECD, Development Aid Stable in 2014 But Flows to the Poorest Countries Are Falling  (2015), http://www.oecd.org/dac/stats/documentupload/ODAper cent202014per cent 20Technicalper cent20Note.pdf.

26 Calculat ions based on data retrieved from the World Bank’s World Development Indi cators 2015, http://data.worldbank.org/data-catalog/world-development-indicators.

27 The Kings Fund, The NHS budget and How It Has Changed   (2015), http://www.kingsfund.org.uk/projects/nhs-in-a-nutshell/nhs-budget.

28 Calculation s based on data retrieved from databases available in association with OECD, Education at a Glance (2015). Latest data available is for 2012.

29 Calculat ions based on data retrieved from the World Bank’s World Development Indi cators 2015. Country GDPdata are expressed in constant 2011 US dollars, using Purchasing Power Parity exchange rates.

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The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201620 21

Projected future conflict costs under different scenarios

The challenge that each country will facein continued cumulative cost dependson assumptions concerning how long

 the conict will continue and how

long recovery might take. Under theoptimistic scenario, the assumption is

 that the conict can be re solved swif tly

and that recovery to non-conict levels

will take either 10 or 15 years. Under the pessimistic scenario, the assumptionis that the conict will continue for

another 5 years with annual contractionof Syrian GDP of 2 per cent in that

period, followed by a 15-year recoveryperiod (from 2020 to 2035).30 Nofurther population changes are assumed.

The loss of total GDP for Syria is shown in

Figure 8. The brown and orange lines show

benchmark and actual GDP per capita,

while the other lines show GDP under

different catch-up assumptions over time.

The area between the benchmarkline and the catch-up lines shows thefuture cumulative costs of conict. If

convergence could be achieved within10 years, the total cost, in today’smoney, would be US$448 billion. But ifit takes 15 years, the total cost in today’smoney would be US$689 billion.

The impacts would be even worse if the conict were to be prolonge d and if

further displacement and damage were to occur. A prolonged conict would

involve costs of US$1.295 trillion in today’s money. The convergence targetsare quite demanding – for catch-up tooccur in 10 years, growth of total GDPwould need to be 8.9 per cent hi gher(5.9 per cent higher for convergence in15 years).

The future costs measured in total terms are shown in Table 2. Results arealso shown with future discounting ofcosts at 3.5 per cent.

As can be seen, the future costs forLebanon and Jordan are much smaller

 than those for Syria. This is because these economies have not reduced toomuch in overall size. They would requireonly minor boosts to the growth rate (in

 the region of 0.2–0.6 per cent) in order to converge back to the non-conict

growth path.

Note that these catch-up scenarios show the additional growth required for totalGDP to return to trend. They do not

reect the fact that growth rates will

need to exceed trends if the populationsof these countries remain larger thanin the past because of the signicant

number of refugees. Therefore, it remainsa challenge for Jordan and Lebanon todeliver additional growth in order for percapita GDP to return to trend.

Likewise, it may be unrealistic to assume that Syria would converge in total GDP terms, as the population will be smaller than the non-conict counter factual

(due to deaths and refugee outow).

The per capita growth rates required for

convergence are shown in Table 3. These

gures assume no further ow of refugees. 31

Figure 8. Syria: Catch-up in total GDP under different scenarios

0

50

100

150

200

250

300

        2        0        1        0

        2        0        1        1

        2        0        1        2

        2        0        1        3

        2        0        1        4

        2        0        1        5

        2        0        1        6

        2        0        1        7

        2        0        1        8

        2        0        1        9

        2        0        2        0

        2        0        2        1

        2        0        2        2

        2        0        2        3

        2        0        2        4

        2        0        2        5

        2        0        2        6

        2        0        2        7

        2        0        2        8

        2        0        2        9

        2        0        3        0

        2        0        3        1

        2        0        3        2

        2        0        3        3

        2        0        3        4

        2        0        3        5

Total GDP (US$ billions, 2011 constant)

Actual 10 year catchup 15 year catchup Prolonged conflictBenchmark 

Source: Frontier Economics analysis of World Bank, UNHCR and Total Economy Database data

30 For Jordan and Lebanon, no further contraction is assumed, but that convergence to the non-conict growth pathonly commences in 2020.

31 Although the net impac ts on total GDP for the neighbouring countries have been estimated, this could include both apositive displacement effect and a negative instability effect. Total GDP might reduce in the event of refugee outow,

 that is, per capita convergence in the host countries cannot necessarily be achieved by repatriation of refugees.

Table 2. Future costs of conict under different conict scenarios (US$ billions)

No discounting With discounting at 3.5 per cent

Syria Jordan Lebanon Syria Jordan Lebanon

Swift resolutionscenario

10-year recovery -513 -23 -11 -448 -20 -10

15-year recovery -841 -38 -19 -689 -31 -15

Prolonged conict

scenario

Total future costs(2016–35)

-1,719 -69 -34 -1,295 -53 -26

Conict period(2016–20) -534 -25 -12 -480 -22 -11

Recovery period(2021–35)

-1,185 -44 -22 -815 -31 -15

Source: Frontier Economics analysis of World Bank, UNHCR and Total Economy Database data

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The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201622 23

more than 50 per cent.41 However, withproductive capacity shrinking faster inother sectors of the economy, agriculturehas assumed a more dominant positionwithin the Syrian economy, accounting for24 per cent of GDP in 2013, compared to16 per cent in 2010.42

Unsurprisingly, unemployment hassoared over the course of the conict,

from 14.9 per cent in 2011 to 52.9 percent by the end of 2015.43 The dwindlingformal labour market has led manySyrians to turn to informal activities,which are often unskilled, labour-

intensive and poorly paid.

Lebanon

After a decade of slow growth due toeconomic crises, political assassinationsand armed conict, Lebanon’s economy

picked up its pace in 2007, with realGDP growing at over 8 per cent for

 three consecutive years.44 Growth wasdriven by capital inows, in particular

from the Gulf Cooperation Council,which nanced consumption and

boosted sectors such as tourism andreal estate.45

By 2011, economic growth had begun

 to stall due to a combination of factors .

The Syrian conict ensured that any

positive growth stopped. Foreign investor

and consumer condence deteriorated

signicantly as a result of the turmoil

in Syria and its security spillovers into

Lebanon, reducing capital ows to

 the country.46 Increased demand and

investment from Syrian refugees has

mitigated but not offset this loss.47 

 Weaker economic growth and increased

government spending to accommodate

 the large numbers of refugees have

severely strained Lebanon’s public

nances, which were already structurally

weak before the conict.48 Coupled with a

rising interest risk premium, growing scal

decits have halted Lebanon’s progress in

reducing its debt-to-GDP ratio, which in

2012 rose for the rst time since 2006.49

Falling demand in Syria, one of Lebanon’s

main export destinations, has hurt

Lebanese exporters that supplied Syria

before the conict. The World Bankestimates that each business exporting

 to Syria prior to the conict would

have, on average, lost US$90,000

in 2012.50 However, the collapse of

Syrian production has also generated

opportunities for Lebanese rms that

did not previously export to Syria; this

replacement effect is estimated to offset

exactly the negative impact on pre-crisis

exporters. 51 Whilst Lebanese exports to

Syria have not changed on an aggregate

level, the conict has had a distributional

impact, benetting exporters of foodstuff

and tobacco at the expense of exporters

of manufactured goods and mineral fuels. 52

The Lebanese labour market has beenprofoundly affected by the inux of

refugees, whose arrival expanded the total labour force by 50 per centby the end 2014.53 Women, youthand unskilled Lebanese workers havebeen particularly affected.54 Syrianrefugees predominantly nd work,

41 Ibid.,15.42 Syrian Centre for Policy Research, Squandering Humanity , 20.43 Syrian Centre for Policy Research, Confronting Fragmentation, 7.44 World Bank, ‘Data – GDP growth (annual per cent)’ (2015), http://data.worldbank.org/indicator/NY.GDP.MKTP

.KD.ZG.45 World Bank, Lebanon Economic Monitor Spring 2015   (2015), 10, http://www.worldbank.org/en/country/lebanon/

publication/lebanon-economic-monitor-spring-2015.46 Ibid.47 Ibid.48 World Bank, Lebanon: Economic and Social Impact Assessment of the Syrian Conict  (2013), 34, http://documents

.worldbank.org/curated/en/2013/09/18292074/lebanon-economic-social-impact-assessment-syrian-conict.49 Ibid.50 World Bank, The Impact of the Syrian Conict on Lebanese Trade   (2015), 4, http://www.worldbank.org/en/country/

lebanon/publication/the-impact-of-the-syrian-conict-on-lebanese-trade.51 Ibid., 32.52 Ibid., 4.53 World Bank, Lebanon Economic Monitor Spring  2015, 13.54 World Bank, Lebanon: Economic and Social Impact Assessment of the Syrian Conict , 83.

32 Chatham House, Syria’s Economy: Picking up the Pieces  (2015), 10, https://w ww.chathamhouse .org/news/2015-06-23-syrias-economy-picking-pieces.

33 Syrian Centre for Policy Research, Confronting Fragmentation, 6.34 Ibid., 30.35 Chatham House, Syria’s Economy , 2.36 Ibid., 3.37 Ibid.38 Syrian Centre for Policy Research, Confronting Fragmentation, 1839 Syrian Centre for Policy Research, Squandering Humanity: Socioeconomic Monitoring Report on Syria (2014), 13.40 Chatham House, Syria’s Economy , 14.

4.3 DISCUSSION OF COUNTRY-SPECIFIC EFFECTS

Syria

Before the start of the conict Syria’s

economic performance was relativelystrong: real GDP grew at 5 per cent onaverage per year, and unemploymentaveraged around 8 per cent between2006 and 2010.32 As reported in section4.2, real GDP per capita in 2015 isaround half of what it might have beenin the absence of conict – a gure that

would have been signicantly higher

were it not for the considerable declinein the size of the Syrian population.

The gures are consistent with reports

of widespread destruction of assets,capital ight, business closure and

bankruptcy.33 The capital stock more than halved between 2010 and 2015.34 Losses have been greatest in the energyand manufacturing sectors.35 Effectiveelectricity generation capacity has been

reduced by 70 per cent since 2011.36 Oil production under state control fellfrom 387,000 barrels per day to less

 than 10,000 barrels per day, as a resultof international sanctions, damage to

rening operations and territorial gains

by armed groups.37 

Meanwhile, the manufacturing sector,once a key driver of economic growth,

 job creation and expor t diversi cation,

contracted to 35.4 per cent of its pre-conict size by 2015.38 Over 90 per centof industrial enterprises had closed in

 the Alsheck Najjar industrial zone inAleppo and the Adraa industrial zonein rural Damascus by the end of 2013;rms that survived the conict were

estimated to have operated at less than30 per cent capacity.39 

Agriculture has also suffered as result of the conict. Wheat production halved

between 2011 and 2014, due to militaryencroachment on farmland; damage

 to grain silos; and shortages of seeds,

fertilisers, pesticides and fuel.40

 Nationalstocks of sheep, cattle and goats havedeclined by 30–40 per cent since 2010,whilst poultry production has fallen by

Table 3. Per capita growth rates required for convergence in per capita terms (2 per cent baselinegrowth rate assumed)

Country 10 -year convergence 15 -ye ar convergence

 Jordan 2.9 per cent 2.5 per cent

Lebanon 4.6 per cent 3.7 per cent

Syria 8.2 per cent 6.1 per cent

Source: Frontier Economics analysis of World Bank, UNHCR and Total Economy Database data

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The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201624 25

programme which reduced public-sector employment,70 and the qualitativeevidence suggests that Syrians tend

 to work in low-paid, informal sectors(especially as formal avenues ofemployment have been closed off)

 that typically employ migrant labourersrather than Jordanian nationals.71 

Furthermore, the increased numbers

of refugees have increased demand and

generated a growing aid economy, likely

 to have created new jobs.72 The ow of

Syrian capital to Jordan is also likely to have

generated employment opportunities for

 Jordanian nationals: Jordan is estimated to have received US$1 billion of foreign

direct investment from Syria in 2013,73 and

 the manufacturing sector in Jordan has

benetted from the relocation of some

Syrian industries.74

Before the outbreak of the conict,

 the countries in the region wereembarking on a process of regional

 trade integration. The World Bankestimates that the foregone benets of

 trade liberalisation were substantial , as this would have accelerated economicgrowth, diversication and job creation

in the region.75 The opportunity cost to Jordan is particularly high, estimatedat four times the direct economic costsof the Syrian conict (in terms of trade,

labour market and population effects).76

Turkey

Turkey saw a series of structuraleconomic reforms following the

recession in 2001 – privatisation, theintroduction of a free-oating lira,

 the establishment of an independentcentral bank and regulatory bodies –

 that improved macroeconomic stabilityand growth over the past decade.77 A stable political environment furtherencouraged domestic and foreigninvestment,78 contributing to rapid GDPgrowth averaging 7 per cent between2002 and 2007.79 By the onset of theSyrian conict, Turkey’s economy had

already rebounded from the impactof the global nancial crisis, with

GDP growing at 9 per cent for twoconsecutive years.80

Due to Turkey’s large and diversied

economy and its relatively stable politicalsituation, the impact of the Syrianconict has been either negligible or

moderately positive. Turkish exports toSyria plummeted immediately after theconict began, but by 2014 had returned

 to pre-crisis levels.81 Overall exports donot appear to have suffered from theconict, as trade to Syria accounts for

only 1 per cent of total exports. 82 

On the other hand, Turkey hasbenetted from signicant capital ight

from Syria. In the rst nine months of

2015, 1,148 companies were founded inTurkey with Syrian capital, a total ofUS$161 million in capital.83 Regions close

 to the Syrian border have particularlygained from Syrian investment; in 2014,Syrian partnerships constituted one in

70 World Bank, Jordan Economic Moni tor Spring 2015, 7.71 Chatham House, Syrian Refugees in Jordan  (2015), 5, https://www.chathamhouse.org/sites/les/chathamhouse/eld/

eld_document/20150921SyrianRefugeesCarrion.pdf.72 International Labour Organisation, Impact of Syrian Refugees on the Jordanian Labour Market , 7.73 Chatham House, Syrian Refugees in Jordan, 6.74 World Bank, Jordan Economic Moni tor Spring 2014, 7.75 World Bank, Economic Effects of the Syrian War and the Spread of the Islamic State on the Levant  , 276 Ibid., 19.77 Chatham House, After the Boom: Risks to the Turkish Econ omy  (2013), 2, https://www.chathamhouse.org/

publications/papers/view/193715.78 Ibid.79 World Bank , ‘Data – GDP growth (annu al per cent)’, 2015.80 Ibid.81 Data extracte d from the Turkish Statistic al Institute, Minist ry of Customs and Trade, Foreign Trade Statistics, www.

 turkstat .gov.tr/PreTablo.do?alt_id=1046/82 Ibid.83 Hurriyet Daily News, Number of New Firms Opened by Syrians in Turkey on Rise (2015), http://www

.hurriyetdailynews.com/number-of-new-rms-opened-by-syrians-in-turkey-on-rise.aspx?PageID=238&NID=90978&NewsCatID=345.

55 Joint Agency Brieng Paper, Right to a Future, 6.56 Ibid., 6.57 World Bank, Lebanon: Economic and Social Impact Assessment of the Syrian Conict , 90.58 World Bank, Lebanon Economic Monitor Spring 2015 , 13.59 World Bank, Lebanon: Economic and Social Impact Assessment of the Syrian Conict , 87.60 World Bank, Data – GDP Growth (annual per cent) (2015).61 World Bank, Jordan Economic Moni tor Spring 2014  (2014), 8, http://www.worldbank.org/en/country/jordan/

publication/jordan-economic-monitor-spring-2014.62 World Bank, Data - Unemployment, Youth Total (per cent of total labour force ages 15–24)  (2015), http://data.

worldbank.org/indicator/SL.UEM.1524.ZS.63 International Labour Organisation, Macroeconomic Polic ies and Employment in Jordan: Tackling the Paradox of Job- Poor

Growth  (2012), 13, http://www.ilo.org/wcmsp5/groups/public/---ed_emp/documents/publication/wcms_191243.pdf.64 World Bank  , Jordan Economic Monitor S pring 2014, 7.65 World Bank, The Impact of the Syrian Conict on Lebanese Trade , 31.66 Ibid., 35.67 Ibid., 14.68 Ibid., 32.69 International Labour Organisation, Impact of Syrian Refugees on the Jordanian Labour Market   (2015), 5, http://w ww.

ilo.org/beirut/publications/WCMS_364162/lang--en/index.htm.

often informally, in low-paid jobs such as those in agriculture, domestic servicesand construction. Until recently, Syrianrefugees in Lebanon had been required

 to sign a pledge not to work in order torenew a residency visa on the basis of

 their UNHCR registration document,leading to an estimated 92 per cent ofrefugees working without a contract orassociated legal rights.55 

This has the effect of driving downwages and displacing Lebanese workersin these sectors. Competition at thelower end of the labour market pushes

both Syrians and Lebanese further intopoverty.56 The World Bank estimates

 that up to 300,000 Lebanese workers,mostly young and/or low skilled, willbecome unemployed as the result of

 the ow of Syrian refugees. 57 On theother hand, business owners in Lebanonbenet from reduced production

costs,58 and Syrian refugees may createother positive labour market effects in

 the longer term by lling s kills shor tages

and generating new employmentopportunities for Lebanese workers.59

 Jordan

 Jordan was still suffering fr om the impactof the global nancial crisis when the

conict in Syria began. Annual GDP

growth had fallen from an average of8 per cent in 2004–8 to 2 per cent in2010.60 The Jordanian labour marketwas structurally weak, with chronicunemployment at around 12 per cent

in 201061 and youth unemployment atmore than 30 per cent.62 The publicsector historically employed over one-

 third of Jordanian employees63 andaccounted for half of total job creation. 64

The conict in Syria has inicted

large losses on Jordanian exporters.Exporters to Syria are estimated tohave lost US$340,000 on average in2012, around three-quarters of theirpre-conict level.65 Exporters of food,livestock, tobacco and manufacturedgoods have been particularly affected.66 The drop in demand for Jordanian

exports has been much steeper thanfor Lebanese exports, perhaps due to

 the highe r intensi ty of conic t in Syrian

areas close to Jordan; in comparison,Damascus, the main Syrian marketfor Lebanese products, has remainedrelatively stable throughout theconict.67 Further, unlike Lebanon,

 Jordani an rms hav e not bene tted

from any signicant rise in demand to

replace the loss of Syrian production. 68 

The impact of Syrian refugees on the Jordanian labour market remainsambiguous. A survey of householdsin the Amman, Irbid and Mafraqgovernorates, which together host76 per cent of all Syrian refugees,shows that unemployment among

 Jordanian nationals has increased from15 per cent in 2011 to 22 per cent in2014.69 However, the conict in Syria

coincides with a scal consolidation

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5. FINANCIAL COSTS

Without access to formal labour markets, displacedSyrians seek out informal opportunities where possibleto earn an income for their families.

There mustbe increasedinvestment in buildingthe resilience ofpeople andcommunities – withinSyria and within thecountries in theneighbourhood whohost many refugees.Development actorscan respond withsupport for jobs andlivelihoods, foreducation and healthprovision, and for basicservices like water,sanitation, electricity,and waste disposal...Services like thesesupport people to livein dignity.”

 – Helen Clarke,UN Development

Programme Administrator

The Cost of Conict for Children |  Ma rch 2016 27The Cost of Conict for Children |  Ma rch 2016 26

 ten new businesses in Hatay and one in three new businesses in Kilis.84

Refugees from Syria have had amixed impact on the Turkish labourmarket. The World Bank reportsevidence of displacement of localworkers in informal and low-wageagricultural occupations.85 The impactis concentrated in provinces along theTurkish-Syrian border, in particularGaziantep and Hatay.86 However, theow of refugees has also generated

higher-wage, formal jobs for Turkishworkers, due to increased demand andreduced costs of production.87 This hasmitigated the displacement effect, such

 that net displacement of local workers

by Syrian refugees is around one-to-one,with a shift in the composition of Turkishemployment towards higher-quality

 jobs.88 These labour market effects, together with inows of capital associated

with ows of people, explain why the

range of overall effects of the conict

on Turkey varies between negligible, on the downside, to moderately positive,on the upside. They are consistent with

 the broader literature on the impact ofrefugees and migrants on the economy ofricher host countries.89 

84 Ibid.85 World Bank, The Impact of Syrians Refugees on the Turkish Labour Market , 12.86 Ibid., 5.87 Ibid., 13.88 Ibid., 3.89 International Monetary Fund, The Refugee Surge in Europe: Economic Challenges  (January 2016), https://www.imf.

org/External/pubs/cat/longres.aspx?sk=43609.0.

90 Middle East Eye, Lost Mines, Oil Fields Further Shrink Syrian Government Coffers  (2015), http://www.middleeasteye.net/news/losses-resources-front-pressure-syrian-government-revenues-969060676.

91 Syrian Centre for Policy Research, Confronting Fragmentation, 33.92 Syrian Centre for Policy Research, Squandering Humanity , 23.93 Ibid.94 Ibid., 24.95 Ibid.96 Ibid., 25

In addition to the economic costsdescribed above, the protractedconict has dramatically weakened

 the scal posit ion in Syria, prompting

 the government to borrow heavily tomaintain expenditure on basic goods.The ow of Syrian refugees into

neighbouring countries also increasedgovernment expenditure in hostcountries in order to expand publicservices provision and maintain servicequality. The diversion of public spendingaway from long-term investment aimedat creating growth and towards short-

 term upkeep of existing provisionis likely to curtail the potential foreconomic growth across the region.

5.1 SYRIA

The loss of infrastructure, trade andemployment as a result of the conict

has severely weakened the Syriangovernment budget. Oil revenues,which accounted for a quarter of allgovernment revenue in 2011, havehalved due to armed conict and

international sanctions.90 Prots from

state-owned enterprises have fallensharply, as have tax receipts fromindividuals and private-sector rms.91 To counter the effects of conict on

living conditions, up through 2013 thegovernment maintained expenditureon public-sector wages and hugelyincreased subsidies and transfers tomeet the need for basic foodstuffs, fueland electricity.92

The government budget balance(including off-budget subsidies) grewfrom 2 per cent of G DP in 2010 to54 per cent of GDP in 2013.93 Thegovernment is increasingly dependenton credit from Iran as its only source

of revenue.

94

 Public debt has increasedsubstantially relative to GDP, from 23 percent in 2010 to 126 per cent in 2013. 95 The additional borrowing reects the

nancing costs of the conict and the

continued need to meet a minimumlevel of service delivery; in a ddition,a shrinking resource base reects a

collapsing economy and a dwindlingpopulation. Because these loans are notbeing invested to create growth, theirrepayment will impose a heavy burdenon the next generation once the violencesubsides.96 Reconstruction efforts after

 the conict ends will place further

demands on government budgets.

It has been a hardship but I feel I have risenin this time.”

 – Hasnaa, a Syrian widow living in Urfa , Turkey, describesworking as a hairdresser to support her four children.

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Public service provisionfor Syrian refugees livingoutside of camps and localpopulations in Lebanon and

 Jordan is at breaking point.

The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201628 29

97 World Bank, Lebanon: Economic and Social Impact Assessment of the Syrian Conict,  63 and 104; USAID, The FiscalImpact of the Syrian Refugee Crisis in Jordan (2014), 1, http://www.frp2.org/english/Portals/0/PDFs/RFP,%20Ads/2015/SYRIAN%20FISCAL%20IMPACT%20February%202014.docx.pdf.

98 World Bank, Lebanon: Economic and Social Impact Assessment of the Syrian Conict,  93 (estimate does not includedefence spending).

99 Ibid., 63; USAID, The Fiscal Impact of the Syrian Refugee Crisis in Jordan, 1.100 World Bank, Lebanon: Economic and Social Impact Assessment of the Syrian Conict , 1.101 Ibid ., 125.102 Ibid ., 7.103 Ibid., 63.104 Ibid ., 7.105 Ibid.106 USAID, The Fiscal Impact of the Syrian Refugee Crisis in Jordan , 8 (estimate does not include social-welfare

spending).107 Ibid., 36.

5.2 NEIGHBOURING COUNTRIES

The large numbers of Syrians seekingrefuge and protection have also taken aheavy toll on the government budgetsof host countries. Refugees living outsidecamps have put pressure on publi c-service provision, which was alreadystretched in Lebanon and Jordan,in particular water and electricityinfrastructure, water and sanitationmanagement, health care and education,as well as defence spending on bordercontrols and policing.97

Further, the adverse effect of Syrianrefugees on local employment levelshas pushed up social welfare spending.The scal cost of accommodating

unprecedented levels of Syrian refugeesis likely to divert government resourcesaway from long-term investments,compromising the future growthpotential of host countries.98

The strain on public services hasreduced access and service quality for

 the local population.99 Restoring servicequality to their pre-conict levels would

require substantial additional costs,further diverting resources from long-

 term investment to short-term upkeep.

Lebanon

The direct cost of Syrian refugees on the Lebanese government budgetis estimated at up to US$1.1 billionbetween 2012 and 2014.100 Increaseddemand for electricity accounts forover half of this increase in governmentexpenditure; electricity in Lebanon isentirely dependent on public subsidies,

with the electricity tariff set below costrecovery level.101 A further fth of the

cost can be attributed to increasedhealth-care use and the pressure onLebanon’s transport infrastructure,which was already in poor conditionbefore the onset of the conict.102 

Spending on the public educationsystem (which previously catered toonly 30 per cent of mostly low-incomeLebanese children103), water andsanitation infrastructure and welfare

benets has also increased as a resultof the numbers of Syrians seekingprotection as refugees.104 As well asincreasing government expenditure, thesurge in demand for public services hasbeen accommodated by reducing thequality of services. The WorldBank estimates that restoring servicequality to pre-conict levels would

require an additional US$2.5 billion ingovernment expenditure.105

 Jordan

The ow of Syrian refugees into Jordan

is estimated to have increased publicexpenditure by US$0.9 billion between2012 and 2013, which represents more

 than 1 per cent of Jordanian GDP.106 Nearly half of that increase, orUS$0.4 billion, is due to increasedsecurity spending, in particular patrolling

 the border with Syria, transportingrefugees and providing security atrefugee camps.108 A further US$0.3billion stems from increased demand for

subsidised goods and services, namely,

electricity, gas, bread and water.108 

Increased demand for health, education

and public works (waste management,

city lighting and road maintenance)

account for the remaining

US$0.2 billion.109 At the same time,

 World Bank data points to a decline in

health expenditure per capita by around

20 per cent between 2011 and 2013.110

In addition to these direct costs, the implicit cost associated with thedeterioration in service quality between2012 and 2013 is estimated at a further

US$0.6 billion.111

Turkey

Turkey’s nance minister estimates that

 the cumulative cost of hosting Syrianrefugees in Turkey reached US$4.5 billionby 2014.112 Around US$2.3 billion of

 this came from the central governmentbudget, with the rest reecting increased

expenditure by local authorities.113 In January 2016, the Turkish governmentreported that it had spent over 7 billioneuro since the beginning of the crisis,noting particularly costs associated withhealth, education, food security and socialand other technical services.114

108 Ibid., 8.109 Ibid.110 Worl d Bank, World Development Indicators, Jordan.111 USAID, The Fiscal Impact of the Syrian Refugee Crisis in Jordan , 8.112 World Bulletin , Turkey Spends $4.5 Billion on Syrian Refugees   (2014), http://www.worldbulletin.net/turkey/147700/

 turkey-spends- 45-billion- on-syrian -refugees-upd ated.113 Ibid.114 This is based on the ofcial gures provided by the Turkish government: European Commission, Humanitarian Aid

and Civil Protection, Turkey: Refugee Crisis, ECHO Factsheet  (January 2016), 2, http://ec.europa.eu/echo/les/aid/countries/factsheets/turkey_syrian_crisis_en.pdf.

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6. WIDER ECONOMIC ANDSOCIAL COSTS

Living indebt is better thanseeing our childrenstarve... We saythank God, becausewe are not starving,we are still alive.”

 – Zakiya, a Syrianmother, aged 42.

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121 World Bank, World Development Indicators database, 2015.122 UNICEF, Education under Fire (2015), 3, http://www.unicef.org/mena/Education-Under-Fire-English.pdf.123 Save the Children, Futures under Threat (2014), 9, http://www.savethechildren.org.uk/resources/online-library/

futures-under-threat.124 Syrian Centre for Policy Research, Confronting Fragmentation, 43.125 OCHA, 2016 Humanitarian Needs Overview: Syrian Arab Republic  (December 2015).126 Ibid.127 UNICEF USA, Infographic: Syrian Children under Siege (2014), https://www.unicefusa.org/stories/mission/emergencies/

conict/syria/infographic-syrian-children-under-siege/582.128 Save the Children, Futures under Threat , 10.129 World Bank, World Development Indicators (2015).

6.1 SYRIA

Prior to the conict, government

spending on education was around20 per cent of total government outlays,in line with UNESCO guidelines.121 

 While actual spending data following the onset of conict is not availab le, it is

likely, in light of the resource constraintsreported in section 0, that spending hasreduced signicantly.

Spending reductions due to conict

directly affect a ccess to education;schools and learning facilities have been

rendered unsafe, overcrowded and underresourced. One in four schools have beendamaged, destroyed or is used to shelterdisplaced people, and over a fth of

 teachers have ed the country.122 

Exposure to violence and forciblerecruitment deter children fromundertaking the journey to school.Internally displaced children andadolescents nd it difcult to access

education in new locations because theymay lack the appropriate documentationand classes are usually at capacity.123

Taken together, these variousfactors have had a dramatic impacton educational indicators. Syria fellfrom 124 to 173 of 187 countries in

 terms of education under the HumanDevelopment Index:124 

More than two million children do notattend school, and 5.7 million are inneed of education assistance. In 2015,400,000 more children were out of

school than in 2014125

 Total enrolment in pre-primary, primaryand secondary school has decreased by44 per cent, from 5.5 million children

in 2010 to 3.1 million in t he 2014–15school year.126 In areas most heavilyaffected by the conict, such as Idleb

and Aleppo, attendance has fallen below30 per cent.127 Only 17 per cent ofSyrian children living in informal camps inSyria are in school.128

As with education, access to health carehas been affected by a combination ofnancial resource constraints and the

destructive effects of the conict on

health infrastructure. Health spending in

real per capita terms fell by over 20 percent between 2011 and 2013.129 Morerecent data is not available, but it is likely

 that spending has fallen further as theeffects of the conict on the resource

base have had further effect.

Combined with falls in spending, attackson health facilities and risks faced byhealth personnel have led to only 43 percent – under half of those functioningpre-conict – of Syrian hospitals being

fully functional, whilst 15,000 doctors – half the total number of cer tied

physicians – have ed the country.

Deterioration in water and sanitationsystems has further increased exposure

 to disease and illness, particularly for those internally displaced.

115 Regional Refugee and Resilience Plan 2016–2017 (3RP), Strategic Overview , http://www.3rpsyriacrisis.org/the-3rp/strategic-overview/.

116 Overseas Development Institute, Living on Hope, Hoping for Education: The Failed Response to the Syrian RefugeeCrisis (September 2014), http://www.odi.org/publications/8829-syria-refugee-education-crisis-hope.

117 Sy rian Centre for Policy Research, Confronting Fragmentation, 51.118 UNICEF, Economic Loss from School Dropout due to the Syria Crisis: A Cost Benet Analysis of the Impact of

the Syria Crisis on the Education Sector   (December 2015), 5, http://learningforpeace.unicef.org/wp-content/uploads/2016/02/Cost-benet_analysis_report_English_nal.pdf.

119 Ibid ., 12.120 OCHA, 2016 Humanitarian Needs Overview: Syrian Arab Republic   (December 2015), http://reliefweb.int/report/

syrian-arab-republic/2016-humanitarian-needs-overview-syrian-arab-republic.

The combination of the direct effectsof conict, nancial constraints and

lost economic resources resulting fromfalling or negative growth rates has hada profound impact on the well-beingof people and communities in the

countries concerned. With the currentfunding requirements for the 2016 SyriaHumanitarian Response Plan and the2016–17 Regional Refugee and ResiliencePlan standing at US$3.2 billion andUS$4.5 billion115 respectively, there canbe no doubt of the severity of impact

 these direct effects have had on the well-being of those affected across the region.

The loss of human capital, throughpoor education and health will inict

long-term damage on productivityand economic growth in the region.

 Without the means for children toreceive support, rebuild their lives andgain essential skills, conditions risk beingcreated that will transmit poverty acrossgenerations, fuel social instability andundermine prospects for recovery.116

Direct and indirect impacts oneducation services resulted in theequivalent of 24.5 million years oflost schooling by the end of 2015.117 Children who no longer either

attend school or receive any informaleducation opportunities not only lose

 the immediate opportunity to learnacademic and social skills, but their

productivity and potential lifetimeincome also decline correspondingly.118 Most recent estimates assigningmonetary value to the economic costof dropout from basic and secondaryeducation in Syria find that the

reduction of lifetime earnings derivedfrom children no longer in school runsinto millions of dollars.119”

Children under 5 are among the

most vulnerable to physical trauma,

injuries, communicable diseases, lack

of immunisations and malnutrition.

Malnutrition amongst children under 2 can

cause irreversible damage to their growth

and development potential. Children

under 5 with severe acute malnutrition

are nine times more at risk of mortality

and morbidity than healthy children.120 

In relation to Syria, populationsof Syrian refugees in neighbouringcountries, and the neighbouringcountries themselves, where the inux

has led to pressure on public schoolsand hospitals, these wider costs reduce

 the overall qua lity of educa tion andhealth care for all vulnerable groups,including local communities.

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We ran intothe hospital’s shelter.After the attack wecouldn’t go up becausewe could still hear thesound of planes. Wewere told it was amissile. The sound ofthe plane was loudand scary, anddestruction was huge.”

 – A World Vision midwifeworking in the hospital(pictured above) at the

time of the attack.

The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201634 35

in the education and health sectorshave been underfunded compared

 to other humanitarian componentsin the response of the internationalcommunity.138 The consequences for

 the education and health conditions ofrefugee populations have been severe:

 Only 48 per cent of refugee childrenfrom Syria, or 667,000 school-agechildren, are accessing educationopportunities, while close to 52 percent, or 708,000 school-age children,were out of school in the 2014–15school year.139 

Reduced quality of care and limitedsupport to meet health care needshave resulted in increased morbidityand mortality, especially among childrenunder 5.140 There is a general shortageof skills and capacity to address thephysical and mental health needs of

 those affect ed by conict.

Many refugee children report living inunsafe tents, camps and small, narrowrooms in remote areas, away frommarkets and stores.141 These crampedliving conditions coupled with lowimmunisation rates and lack of access

 to water and sanitation combine toresult in a high incidence of disease. Theincrease in communicable diseases suchas typhoid, hepatitis and measles poses adirect risk to the health of both refugeeand host-community families.

Previously barred from formalemployment, refugee families are oftenunder acute nancial pressure. The

 World Bank reports that nine in tenrefugees living in Jordan and Lebanoncan be considered poor, measured on

 the basis of the poverty lines used in these countries.142 The vulnerability ofrefugees to poverty and their lack ofaccess to services and labour marketshas meant, amongst other things, thatparents are sending their children towork or entering them into marriageat a young age just to help the familysurvive, making them less likely to return

 to school. The main child protectionrisks for refugees are child labour, earlymarriage, recruitment into armed forcesand groups, family separation, lack ofbirth registration, and violence in homes,

schools and communities.

143

 Lebanon

Services in Lebanon have struggled tocope with the spillover effects of conict.

Prior to the conict, capacity constraints

in the public education sector werealready evident. Overcrowding is an issue,as the Lebanese public school system,designed to accommodate around300,000 Lebanese children, struggles

 to accommodate the 400,000 Syrianrefugees in need of an education.144 InLebanon, only 20 per cent of Syrianchildren are formally enrolled in school,whilst nearly 70 per cent are not receivingany form of education whatsoever.145 More than 204,000 Syrian children (5

 to 17 years), remain out of school.146 Language differences also act as a majorbarrier to enrolment, as Lebaneseschools teach maths and sciences ineither English or French, which very fewSyrian children understand.

The United Nations has warned that the pressure on primary health centresand hospitals in Lebanon is such that it

138 Regional Refugee and Resilience Plan 2016–2017 (3RP), Strategic Overview .139 Join t Agency Brieng Paper, Right to a Future .140 3RP, Progress Report .141 World Vision International, Stand with Me: Ending the War on Syria’s Children (November 2013), http://www.wvi.

org/jordan/publication/stand-me-ending-war-syrias-children.142 World Bank, The Welfare of Syrian Refugees: Evidence from Jordan and Lebanon  (2015), http://www.worldbank.org/

en/news/feature/2015/12/16/welfare-syrian-refugees-evidence-from-jordan-lebanon.143 Regional Refugee and Resilience Plan 2016–2017 (3RP), Strategic Overview .144 Save the Children, Futures under Threat  (2014), 21.145 3RP, Progress Report .146 Ibid.

The cumulative impact on healthindicators has been profound. By theend of 2015, the health index decreasedby 30.3 per cent from 2010, placingSyria among the worst countries in theworld in terms of health according to theHuman Development Index, at 174 outof 195 countries.130

 In 2010, estimated life expectancy at

birth was 70.5 years. In 2015, estimated

life expectancy at birth was 55.4 years.131

45,000 pregnant women are at risk ofdeveloping complications, which couldlead to a rise in infant mortality.132

Over 2 million children under 5 aremalnourished or at risk of malnutrition.133 Of boys and girls aged 6 –59 months,3.16 million are in need of preventive andcurative nutrition services. Of these, an

estimated 86,000 children are acutelymalnourished.134

 Sharp drops in child immunisation rates,from 90 per cent before the conict

began to 50 per cent in 2014, haveincreased the incidence of water-bornediseases such as typhoid and diarrhoea.135 Polio re-emerged in 2013 for the rst

 time in 14 years.136 

6.2 NEIGHBOURINGCOUNTRIES

Syrian refugees, particularly over2 million Syrian children living inneighbouring countries as refugees,have faced multiple constraints inaccessing basic services. This in partreects the constraints these services

were already under prior to the conict

and the refugees eeing the violence.

 While some attempts have been

made to meet this added demand through foreign grants,137 investments

130 Sy rian Centre for Policy Research, Confronting Fragmentation, 43.131 Ibid.132 World Health Organisation, Syria Situation Report September 2015   (2015), 1, http://reliefweb.int/report/syrian-

arab-republic/syria-crisis-monthly-humanitarian-situation-report-september-2015-syria.133 New Internationalist Blog, Syria’s Shameful Healthcare Quagmire (2015), http://newint. org/blog/2015/03/17/syria-

healthcare/.134 OCHA, 2016 Humanitarian Needs Overview: Syrian Arab Republic  (December 2015).135 New Internationalist Blog, Syria’s Shameful Healthcare Quagmire .136 UN, Urgent Action Needed to Protect Children against Polio in Syria, Iraq and Region   (2014), http://www.un.org/apps/

news/story.asp?NewsID=48325#.Vng877FFDIU.137 3RP, Progress Report   (June 2015), http://www.3rpsyriacrisis.org/wp-content/uploads/2015/06/3RP-Progress-

Report.pdf.

This World Vision-supported hospital, specialising in maternal, newbornand children’s health, was affected by one of the many attacks against

hospitals in Aleppo Governorate, northern Syria in February 2016.

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37The Cost of Conict for Children |  Ma rch 2016 36

‘I didn’t want to get married. I was too young.’

Ghadeer* was just 13 years old when her father arranged for her to marry her cousin.

‘Many times I saw how men were looking at my daughter, and I was afraid she would get abused. Once aman followed her home to our tent. Thankfully, I was home,’ he says. ‘I knew her cousin wanted to marryher, so I forced her because I was afraid to lose her.’

It’s a decision he now deeply regrets. Ghadeer’s now-husband and mother-in-law beat her, and she is often

covered in bruises. ‘I feel very guilty. My wife is angry wit h me. I swear that I wanted to protect her. I did not know

 this would happen,’ he says. ‘Sometimes, I think of killing myself as I am the one responsible for this marriage.’

As if to agree, his wife chimes in, ‘He would not listen. I begged but he would not listen. She was too young.’

Ghadeer, now 15 years old, visits her parents and younger siblings once a week in their informal tentedsettlement in Lebanon’s Bekaa Valley. She says it’s the only ti me she feels happy.

‘I didn’t want to get married. I was too young. I miss my family, friends and school. I asked my husband if Icould go back to school, bu t he said no,’ says Ghadeer. ‘I w anted to be a lawyer. If I got the chance now, I’dspecialise in making sure other girls do not have to experience what I have.’

Ghadeer fears becoming pregnant, saying she is not ready psychologically or physically. ‘I have to look aftermy husband’s large family. I work very hard, and I’m tired. I just want to go back to Syria and rest.’

Ghadeer’s mother says prior to her marriage she was a warm and happy child who loved to eat candy-floss.Now she is sombre and withdrawn.

To ensure that other parents don’t push their daughters into similar circumstances, Ghadeer’s mother nowserves on World Vision’s Child Protection Committee, raising awareness in refugee settlements about thenegative impact of early marriage.

*Name has been changed to protect her identity.

Ghadeer* refuses towear her wedding ringon her left hand

   P   h  o   t  o  c  r  e   d   i   t  :   C   h  r   i  s   t  o  p   h  e  r   L  e  e

147 3RP, Progress Report .148 World Bank, Lebanon: Economic and Social Impact Assessment of the Syrian Conict , 63.149 Regional Refugee and Resilience Plan 2016–2017 (3RP), Strategic Overview .150 World Bank, Lebanon: Economic and Social Impact Assessment of the Syrian Conict , 63.151 Ibid., 70.152 UNICEF, Education Under Fire (2015), 3.153 USAID, The Fiscal Impact of the Syrian Refugee Crisis in Jordan, 16.154 Ibid.155 Ib id., 21–22.156 3RP, Progress Report .157 Human Rights Watch, ‘When I Picture My Future, I See Nothing’ – Barriers to Education for Syrian Refugee Children

in Turkey   (2014), https://www.hrw.org/report/2015/11/08/when-i-picture-my-future-i-see-nothing/barriers-education-syrian-refugee-children.

158 Regional Refugee and Resilience Plan 2016–2017 (3RP), Strategic Overview , 34.

 threatens to collapse the health-care

system if not reinforced with additional

staff numbers and capacity building,

equipment and space.147 The overall

increased demand has driven up costs

and generated medication shortages.148

Varying degrees of access to primary

health-care services, combined with

overcrowding, substandard housing

and limited access to safe water and

sanitation, have heightened the risk of

communicable disease for vulnerable

refugees and local communities alike.149 

Lebanon has seen a sharp surge in

communicable diseases since thebeginning of the conict. The incidence

of measles increased from nine cases in

2012 to 1,456 cases in 2013; there also

has been a notable increase in cases of

hepatitis A and mumps in the past two

years.150 Diseases previously unknown

 to Lebanon, such as leishmaniasis, have

emerged since the conict.151

 Jordan

In Jordan, where more than half the

registered refugees are children under

 the age of 18, 50 per cent of refugee

children are formally enrolled in the

public school system and a further

35 per cent are receiving informal

education.152 This strain on the public

education system has compromised

 the quality of education provided and

delayed reforms that were under way by

 the Jordanian government. Before the

onset of the conict in Syria, Jordan had

made progress in reducing class sizes

and eliminating the practice of ‘double

shifts’ in overcrowded schools. In 2013,

however, 67 schools reintroduced second

shifts to absorb an additional 34,000

Syrian refugees.153 

Funding constraints have led the

government to introduce user fees

for Syrian refugees in line with those

charged to uninsured Jordanians.

This decision has reportedly had a

negative impact on access of vulnerable

Syrians to public health services,

including hospital-based delivery

care.154 The conict has also increased

 the inciden ce of disease in J ordan.

Measles, eradicated in Jordan in 2008,

has resurfaced among Syrian refugeecommunities, whilst the incidences of

hepatitis, tuberculosis and leishmaniasis

have also increased.155 Activities relating

 to infant and young child feeding remain

critically underfunded, compromising

 the optimal g rowth and wel l-being of

refugee children.156

Turkey

In Turkey language barriers have

affected the ability of refugees to

access education and health services,

as refugees struggle to understand the

processes by which to use services

 they may be entitled to. While around

90 per cent of Syrian refugees living in

refugee camps in Turkey regularly attend

school, the majority (87 per cent) of

Syrian refugees in Turkey live outside

refugee camps, where three in four

school-aged children are not in school.157 

As of August 2015, in Turkey, there

were over 663,000 registered Syrian

refugee school-age children, of whom an

estimated 433,000 were out of school,158 

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In 2015, a sharpincrease in refugeearrivals into Turkeyexacerbated pressureon existing healthservices. World

Vision providedkits for babies andyoung children whichincluded sanitationand hygiene items.

The Cost of Conict for Children |  Ma rch 2016 39The Cost of Conict for Children |  Ma rch 2016 38

Source: Frontier analysis of World Bank, UNHCR and Total Economy Database data

‘There is no choice. I must bring money’

Twelve-year-old Radwan’s family fled its home in Daraa, Syria, three years ago.

Unable to work in Jordan, his father returned to Syria in 2014 and was killed in August 2015. His mother is illwith diabetes and unable to afford medicine.

Radwan works long hours as a day labourer on construction sites in Irbid to buy vegetables for his familyand pay the rent on their small apartment. It is backbreaking work. ‘I make the cement in a bucket and thengo fetch the blocks. There is no choice. I must bring money. This is the only way.’

Until January 2016, Radwan had not stepped foot in a classroom for more than four years. Now, he is one

of almost 1,000 Syrian and Jordanian children taking part in a remedial education programme run by WorldVision in Jordan.

It’s not a perfect solution by any means. These are catch-up lessons, just four hours long, not thecomprehensive education Radwan, and children like him, deserve.

‘I want to learn to read and write properly, so I can teach other children. I’d like to be a teacher if I am able.’

Between work, school and caring for his mother and younger siblings, Radwan has little time left to be achild. ‘I am always tired. I wish to have a normal life without problems.’

In addition to the remedial education programme, World Vision also runs a No Lost Generation 161 programme in 28 more schools throughout Jordan. The classes serve more than 2,000 students.

Radwan recitesthe letters of thealphabet posted on theclassroom wall.

although this is likely to have risen since

 then as overall refugee numbers haveincreased as of February 2016.

The health sector in Turkey has comeunder signicant strain, with clinics

reporting a 30–40 per cent increasein patient load.159 Turkey hosts a largenumber of Syrian refugees injuredin the conict who require medical

attention; as of October 2014, about250,000 Syrian refugees received in-patient care, and more than 200,000

patients underwent operations.160 Keyinformant interviews undertaken by

 World Vision indicated that the Syrianrefugees eeing the violence – who are

disproportionately likely to be sufferingfrom distress or mental health issues –have strained a system already struggling

 to provide psychosocial support.Interviewees explained that even inTurkey such services were not widelyavailable before 2011.

159 Regional Refugee and Resilience Plan 2016–2017 (3RP), Strategic Overview .160 3RP, Regional Refugee and Resilience Plan 2015-16: Turkey  (2015), 53.161 The No Lost Generation initiative was launched by a coalition of partners, of which World Vision is one, in 2013

 to call for investment in expanding access to learning, and providing a protective environment and broadeningopportunities for children and adolescents in Syria and the neighbouring countries. The initiative has generatedcritical funding to help meet the direct educational and psychological needs and rights of vulnerable children. It alsoadvocates for stronger child-focused policies in host countries in order to reach more deeply into communitiesunder immense strain as a result of the Syria crisis.

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The Cost of Conict for Children |  Ma rch 2016 41The Cost of Conict for Children |  Ma rch 2016 40

Table 4. Basic model – impact of variables on GDP per capita

Variable Coefcient T-statistic

1996 dummy -0.0078 -1.35

1997 dummy 0.0018 0.41

1998 dummy 0.0051 1.05

1999 dummy -0.0042 -0.87

2000 dummy -0.0026 -0.64

2001 dummy 0.007 1.79

2002 dummy -0.002 -0.57

2003 dummy -0.0022 -0.55

2004 dummy 0.0092 2.24

2005 dummy 0.0231 5.67

2006 dummy 0.0175 4.53

2007 dummy 0.0228 5.48

2008 dummy 0.0192 4.64

2009 dummy -0.0039 -0.96

2010 dummy -0.0406 -8.51

2011 dummy 0.0045 1.3

2012 dummy 0.0021 0.56

2013 dummy -0.004 -1.21

2014 dummy -0.0036 -1.08

2015 dummy -0.0016 -0.57

Gross capital formation 0.1587 9.54

Industry share -0.0868 -5.4

Services share -0.1061 -7.34

Literacy rate 0.032 4.68

Log GDP per capita -0.005 -2.89

Savings rate 0.022 1.97

Low-income country dummy -0.0213 -3.77

Lower-middle-incomecountry dummy

-0.0072 -2.04

Trade share of GDP 0.0023 1.67

Constant 0.0916 5.3

Number of observations – 2,418, R-squared 0.24

Source: Frontier Economics analysis of World Bank, UNHCR and Total Economy Database data

7. TECHNICAL ANNEX

162 The sample period runs from 1995 to 2015, covering 123 countries. Countries wit h signicant gaps weredropped from the dataset – predominantly sub-Saharan Africa, smaller countries and dependencies.

163 Insignicant variabl es in the wider dataset dropped from the model are manufacturing share of GDP, naturalresource rents (i.e. the total revenue that can be generated from extracting natural resources, less the costs ofextract ion), shar e of GDP, unemployment rate and population density.

The impact of conict is calculated by

comparing the actual GDP growth rateswith benchmark growth rates. Thesegrowth rates are applied onward from2010 to show how GDP per capitaevolves in the actual and counterfactual

scenarios. The difference between the two is attributed to the effect of conict.

7.1 GENERAL APPROACH

The benchmark growth rates arecalculated using a pooled panel datafrom over 120 countries. This explains

 the growth rate as a function of countrycharacteristics, as well as a series of

 time dummies that control for globalmacroeconomic conditions prevailingeach year. This allows for countries togrow at different rates, depending on

 their characteristics, and for there tobe common shocks each year. Thisis consistent with the literature onconvergence, which holds that less-developed countries have more growthpotential and will grow faster thanalready-developed countries.

The choice of country characteristics forcontrol has been informed by academicliterature on economic growth. The rst

step was to identify potentially relevant

variables in the World Bank WorldDevelopment Indicators and then toexplore the coverage of each variableacross countries and, over time, to workout the potential scope of the dataset. Itis important to note that there are trade-offs between the time period, range ofcountries and range of variables that can

be included, on one hand, and ensuring that the time series does not have gaps.162 Further gaps in the data are addressedusing the IMF World Economic Outlookand Total Economy Database.

A general-to-specic approach is then

used to identify which of these variablesshould be included in the estimation. Thisstarts with the full range of var iables in

 the model, and one by one drops those that are statistically insignicant, so that

only the relevant variables are retained.

This produces the following model:163

Growth GDP capita_it = a + (dummy)

year_t + Gross capital formation_it

+Industry share_it + Services share_it +

Literacy rate_it + log GDP per capita_it

+ Savings rate_i t + (dummy) Low income

country_i + (dummy) Lower middle

income country_i + Trade share of GDP_ 

it + u_it for country i in year t.

Results for the model are shown inTable 4. As the goal is to forecast GDPgrowth for Syria, Lebanon, Jordan andTurkey – and to avoid having the actualoutcomes for these countries affect theestimates – these countries are excludedfrom the estimation sample, along withIran, Iraq and Israel.

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The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201642 43

latter, then modelling persistence effectsis not justied.

For countries with non-persistent growthrates the lag model is actually worse atpredicting outcomes. Syria, Jordan andTurkey all have non-persistent growthpaths, although Lebanon shows agreater degree of persistence, perhapsreecting the effects of sustained political

uncertainty or reconstruction fromprevious conicts.

Year-on-year noise

There are a number of reasons why

 the yearly country data of the WorldDevelopment Indicators may beinaccurate. If there are issues regarding

 the date at which income is recognisedor there are revisions to a country’saccounting methodology kicking in onlyat a certain year, this may give sharpmovements in the year-on-year growthrate. This will add noise in the model,which will not be explained by thecontrol variables. Aggregating acrossyears will reduce this noise and improve

 the model t. Moving from an annual

model to a model estimated on ve-year

periods improves the t from 24 per

cent to 29 per cent. If a lag term is added(showing performance in the previousve-year period), the model t increases

 to 43 per cent. A different model, inwhich the dependent variable is thechange in average growth rate between2006–10 and 2011–15, was also used, aswas control for average growth in theperiod 2006–10 to capture any meanreversion effects. This gives similar results,but with a model t of 64 per cent.

Again, the appropriateness of extendingprevious performance out to subsequentperiods may vary by country.

Country impacts underdifferent models

Table 5 shows how countryperformance relative to benchmarkvaries under different modelspecications. As is clear, the various

modelling renements improve the t of

 the model. However, they have relativelyminor impact on estimates of countryperformance, suggesting that model t is

not a particular issue. Impacts are in therange of -2.6 per cent to -2.3 per centfor Jordan; -5.6 per cent to -4.9 per centfor Lebanon; and -11.7 per cent to-10.3 per cent for Syria – all rmly

negative. There is more uncertaintyregarding Turkey, with both positive andnegative impacts shown.

Table 5. Country impacts under different model specications

Model R-squared Average perfomance relative to benchmark (2011–15)

 Jordan Lebanon Syria Turkey

Basic model 0.24 -1.7% -4.9% -11.6% 0.9%

Annual model with 1-year lag 0.38 -1.4% -5.2% -10.6% -0.2%

Annual model with 3 lags 0.39 -1.5% -5.0% -10.3% 0.1%

5-year model 0.29 -1.5% -4.9% -11.7% 0.8%

5-year model with lags 0.43 -1.5% -5.5% -11.4% 0.9%

5-year difference model

with lag (2006–15)

0.64 -1.6% -5.6% -10.3% 0.4%

Source: Frontier Economics analysis of WDI, WEO, TED and UNHCR data

Multiplying these coefcients by the

country characteristics gives the estimateof GDP per capita growth for that year.For example, a country with gross capitalformation of 23 per cent, 30 per centindustry, 60 per cent services, 80 per centliteracy, US$5,000 GDP per capita, 20per cent savings rate, 50 per cent tradeas share of GDP and classied as lower-

middle income would have an estimatedgrowth rate of 4.1 per cent in 2000, butonly 0.3 per cent in 2010. The 2011–15forecasts for Syria, Lebanon, Jordan andTurkey are derived in exactly this fashion.

Note that the 2011–15 predictions for these countries use 2010 characteristicsinstead of 2011–15 actuals, as the lattermay themselves be affected by the onsetof conict (for example, conict lowers

 the savings rate, which would in turnlower the benchmark).

The benchmark growth rateswill comprise an average globalmacroeconomic component and acountry characteristics component.164 

Many countries have quite volatile growth trajectories, undergoing sharp growthor contraction in one year, which is notexplained by the growth drivers and isnot correlated with patterns in othercountries. It is not straightforward tocontrol for such country-specic shocks

in the context of a general model, as these shocks by their very nature areidiosyncratic and do not follow uniformlyfrom such aggregate data. Hence, thebasic regression model explains 24 percent of variation in growth rates, with the

other 76 per cent still unexplained. 7.2 MODEL REFINEMENTS

A number of renements to the model

 that im prove the ‘goo dness of t’ were

explored. While these renements do

not substantially alter the results, theydo shed further light on the questionof model t and the reasons for

volatility in growth rates. Two sourcescontributing noise to the model –persistent deviations in g rowth rateand year-on-year noise – are discussed.Then, estimates of the performancerelative to benchmark in the conict

period under a number of differentmodels are presented.

Persistent deviations incountry-level performance

Some countries show sustained periodsfor which growth is higher or lower thanmight be expected. Including lag termsallows for persistence in GDP growthover time. This indicates that, on average,40 per cent of GDP performance willpersist from year to year. Including thelag terms markedly improves the t of

 the model, so that 39 per cent of thevariation can be explained in the model.

However, the effect of this ‘renement’

on the accuracy of predictions varies bycountry, depending on the degree ofpersistence in growth rates. Looking indetail at each country’s growth pattern,some show much more persistence

 than others. As may be expected, theimprovement in model t comes from

better predicting outcomes in thecountries with persistent growth rates. Insuch cases the growth rate observed oneyear gives a reliable signal of likely growth

 the next year. But if growth rates aremore volatile, this signal becomes weaker.

The raises the question of how muchof the pre-conict performance might

have been expected to continue into the 2011–15 period. Are the pre-conict

deviations trends that would havecontinued, or are they just ‘blips’? If the

164 Note that this model assumes that the effects of growth drivers are constant over time and that global shockshave similar impacts across countries. It is possible that some drivers may decline or increase in importance over

 time if, for example, some sectors undergo par ticular bouts of innovation at cer tain times, giving greater scopefor growth. It is also possible that in addition to global shocks, there may be temporal shocks common to sub-groups of countries, for example, the Eurozone crisis and the Asian nancial crisis in 1999.

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The Cost of Conict for Children |  March 2016 The Cost of Conict for Children |  Ma rch 201644 45

Figure 9. Comparison of WDI and TEC data sources for Syrian GDP7.3 NOTE ON DATA SOURCES

The main data source used in theanalysis is the World Bank’s WorldDevelopment Indicators (WDI), whichprovides data on GDP, population anda number of control variables used toestimate counterfactual GDP. The TotalEconomy Database (TED) was used

 to ll in some gaps in the GDP d ata,

and the UNHCR data to construct arefugee-inclusive population measure.GDP and population sources arediscussed below.

GDP dataThe main GDP data comes from the

 WDI dataset. The variable of interestis ‘NY_GDP_PCAP_PP_KD’, which is

GDP per capita , PPP (constant 2011international $). Where there are gaps,

 this is supplemented with other dataon constant GDP per capita. This data

 typically extends up to 2014.

The most recent GDP data is to befound in the TED, which includes GDPestimates for 2015. The 2015 data wasincorporated by using the ‘GDP-CapitaEKS’ variable from TED, which measuresGDP per capita in 2014 US$ (converted

 to 2014 price level with updated 2011PPPs). The growth rates in this series areapplied to the NY_GDP_PCAP_PP_KD

series to create an extended series ofreal GDP per capita that is measured ona consistent basis over time.

For Syria, the NY_GDP_PCAP_PP_KD

series is not reported at all in the WDI.

Instead, we use ‘NY_GDP_PCAP_KD’- GDP per capita (constant 2005 US$),which is available up to 2007. Note thatgrowth rates in NY_GDP_PCAP_PP_ 

KD and in NY_GDP_PCAP_KD are the

same; all that differs is the $/PPP base.

The series is extended up to 2015 byusing the using growth rates from theTED data and r e-basing it i nto 2011 PPP-adjusted dollars for comparability withother countries. So, essentially the GDPdata for Syria in the conict period is the

TED data. As can be seen in Figure 9, the TED and WDI series are very similarover time. Therefore, there should notbe any issues involved with using theTED data.

Population data

Population data is taken from the ‘SP.POP.TOTL’ measure in the WDI. Thismeasure counts all residents regardlessof legal status or citizenship, butexcludes refugees not permanentlysettled in the country of asylum, whoare generally considered part of thepopulation of their country of origin.This series goes up to 2014; 2015 dataare created by applying 2014 growthrates to 2014 totals.

The UNHCR Refugee PopulationStatistics are then used to construct arefugee-inclusive measure of population.This lists refugee populations foreach country of origin and country ofresidence. Refugees originating from acountry are subtracted from the origincountry’s population and added to thepopulation of the country they areresiding in. Refugee-inclusive GDP percapita numbers and associated growthrates are calculated by dividing through

 the GDP series derived above by thesepopulation gures.

Counterfactual population gures are

derived by assuming no further changes in

refugee population from 2010 onwards.

0

50

100

150

200

250

300

350

TED - GDP capita EKS WDI - GDP_PCAP_KD

        1        9        6        0

        1        9        6        5

        1        9        7        0

        1        9        7        5

        1        9        8        0

        1        9        8        5

        1        9        9        0

        1        9        9        5

        2        0        0        0

        2        0        0        5

        2        0        1        0

        2        0        1        5

Source: Frontier Economics analysis of World Bank, UNHCR and Total Economy Database data

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 World Vision is a Christian relief, development

and advocacy organisation dedicated to

working with children, families and communities

worldwide to reach their full potential by tackling the causes of poverty and injustice. World Vision

is dedicated to working with the world’s most

vulnerable people. World Vision serves all people

regardless of religion, race, ethnicity or gender.

INTERNATIONAL OFFICES

World Vision International Executive OfceWaterview House1 Roundwood AvenueStockley Park UxbridgeMiddlesex UB11 1FGUK+44.207.758.2900

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NY 10017USA+1.212.355.1779 World Vision International Genevaand United Nations Liaison OfceChemin de Balexert 7-9Case Postale 545CH-1219 ChâtelaineSwitzerland+41.22.798.4183

World Vision Brussels and EU Representation ivzw18, Square de Meeûs1st Floor, Box 2B-1050 BrusselsBelgium+32.2230.1621

www.wvi.org

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BRUSSELS | COLOGNE | LONDON | MADRIDFrontier Economics Ltd71 High HolbornLondon WC1V 6DA

Tel: +44 (0)20 7031 7000Fax. +44 (0)20 7031 7001www.frontier-economics.com